Journal of Management and Sustainability; Vol. 4, No. 4; 2014 ISSN 1925-4725 E-ISSN 1925-4733 Published by Canadian Center of Science and Education 55 Why do Firms Implement Voluntary Environmental Actions and How Are These Activities Evaluated? An Empirical Investigation in Mexico Lorena Carrete 1 , Pilar Arroyo 2 & Andrea Trujillo 3 1 Associate Professor of the Marketing and Management Science Department, School of Business, Tecnológico de Monterrey Campus Toluca, México 2 Associate Professor of the Industrial and Systems Engineering Department, School of Engineering, Tecnológico de Monterrey Campus Toluca, México 3 Associate Professor of the Marketing and International Business Department, School of Business, Tecnológico de Monterrey Campus Santa Fe, México Correspondence: Lorena Carrete, Eduardo Monroy Cárdenas # 2000, 50110 San Antonio Buenavista, Toluca, México. Tel: 52-722-279-9990 ext. 2249. E-mail: lcarrete@itesm.mx Received: August 23, 2014 Accepted: October 2, 2014 Online Published: November 24, 2014 doi:10.5539/jms.v4n4p55 URL: http://dx.doi.org/10.5539/jms.v4n4p55 Abstract Since green sustainability is obviously challenging to all companies, a clearer understanding of the perceptions of industry practitioners will assist those actors—government, industrial and civil associations and non-governmental organizations—interested in supporting green actions to inspire new ways of improving compromise and participation of private firms in the solution of the environmental problem. The objective of this work was to identify specific drivers and potential barriers to green actions perceived by firms operating in a developing economy like Mexico. Multinationals, Mexican firms with international operations, and Mexican firms with local operations were considered for this study in order to contrast their motivations, inhibitors, and indicators of environmental performance. A qualitative approach was used to collect information about 34 firms. The main driver of green practices was social responsibility for the environment while the principal inhibitor was the low environmental consciousness of the market. Differences between the distinct types of firms are discussed. Keywords: voluntary environmental practices, drivers, barriers, environmental performance indicators, ecological responsibility, Mexico 1. Introduction Corporate environmental practices have evolved from conformance with environmental regulations and mandated responsibilities to cooperative and proactive actions to improve the firm’s environmental and business performance (Moon & Leon, 2007). According to Darnall and Carmin (2005), the implementation of voluntary environmental (VE) actions sends a “signal” to consumers, business partners, and authorities that a company is doing something to prevent the deterioration of the environment. This signal not only provides information about the firm’s ecological activities but also contributes to reinforce its reputation. However, the realization of VE activities does not necessarily have a significant environmental impact. Even well-structured voluntary environmental programs (VEPs) may be weak in terms of environmental performance; and, in some extreme cases, may create opportunities to block stronger regulations (Lyon & Maxwell, 1999). Environmental protection in developing economies is a significant challenge for several reasons. Among these reasons, Rao et al. (2009) identified the following: (1) lack of environmental awareness among individuals and enterprises, (2) continuous pressure for economic growth, and (3) lack of resources (financial and technical) to implement pro-environment programs. Despite the fact research on environmental management has resulted in a meaningful body of knowledge, several research questions still require a deeper understanding. Among them is why private firms decide to implement ecological strategies? This question is relevant for the design of policies and voluntary programs that protect the environment and are in alignment with the organization’s drivers (Bansal & Roth, 2000; Leonidou & Leonidou, 2011).