Voluntary development of environmental management systems: motivations and regulatory implications

Encouraging firms to develop voluntarily more comprehensive environmental management systems (EMSs) is touted as a policy tool to augment mandatory environmental regulations. Using a unique dataset of environmental management practices of Japanese manufacturers and controlling for self-selection bias in survey responses, we find that proxies for regulatory pressures and consumer pressures are the most important factors that motivate firms toward more comprehensive EMSs. Despite the oft-claimed voluntary nature of EMS development, our results show that the government may have a role to play in both directly and indirectly affecting EMS development by firms.