How to control environmental strategy?

This paper is motivated by an interest in understanding what “environmental measures” are used in corporate reports and how firms might control the environmental strategy. We put forward a framework for the control of the strategic management of environmental issues. This framework is used for an empirical investigation of annual reports and social reports of a sample of large public firms. By using content analysis, our findings show: i) that the firm focuses on strategy formulation and strategy implementation more than on environmental results; ii) what are the most relevant key value drivers and performance indicators in firms’ reporting; iii) that environmental value driver and performance indicators are positively associated with sectors. Indeed, we offer some relevant insights on the relative absence of indicators of competitive advantage and on the predominant use of environmental qualitative and/or non - financial measures. This evidence suggests that there is a lack of consideration for the relationship between environmental strategies and environmental results and there is high variability and limited standardization in environmental practices with implications for both internal and external stakeholders’ view. For the internal stakeholder, it seems that the actual environmental strategy control systems need, first, to develop models and tools with reference to the relationship between environmental performance and financial effects. Instead for external stakeholders, the actual limits in the reporting of environmental measures pose the need to increase the comparability of environmental performance that is still very low. Furthermore, integrating theoretical and empirical findings, we suggest some potential improvements for environmental strategy performance measurement systems.