EG41CH11-Prakash ARI 11 August 2016 11:3 R E V I E W S I N A D V A N C E Corporate Environmentalism: Motivations and Mechanisms Elizabeth Chrun, 1 Nives Dolˇ sak, 2 and Aseem Prakash 1 1 Department of Political Science, University of Washington, Seattle, Washington 98195; email: aseem@uw.edu 2 School of Marine and Environmental Affairs, University of Washington, Seattle, Washington 98195 Annu. Rev. Environ. Resour. 2016. 41:11.1–11.22 The Annual Review of Environment and Resources is online at environ.annualreviews.org This article’s doi: 10.1146/annurev-environ-110615-090105 Copyright c  2016 by Annual Reviews. All rights reserved Keywords corporate environmentalism, stakeholder theory, CSR, environmental stewardship Abstract Corporate environmentalism (CE) pertains to firm-level efforts to reduce pollution and resource use along with protecting natural habitats. Impor- tantly, firms pledge to undertake these actions beyond the requirements of the law. Although historically CE efforts focused on resource conservation, their contemporary focus is on pollution reduction to reduce direct harm to humans and their communities and on the protection of environmental sinks. We review two broad categories of CE: direct CE and indirect CE. Direct CE, whether undertaken unilaterally or collectively, pertains to firms them- selves adopting policies that reduce the environmental impact of their ac- tivities, or disclosing information about their environmental performance. Indirect CE refers to policies of actors (such as financial institutions) that encourage firms seeking their resources (through loans, venture capital, etc.) to commit to environmental stewardship policies. Three key lessons emerge. First, firm-level characteristics, particularly size and economic performance, encourage CE. Second, although pressure from external stakeholders, espe- cially environmental nongovernmental organizations (NGOs), has played an important role in discouraging policies that harm the environment, its effect on encouraging pro-environmental activities remains unclear. Third, the literature is ripe with serious methodological issues. The endogeneity between firms’ economic and environmental record and their CE efforts poses difficulty in drawing causal inferences. 11.1 Review in Advance first posted online on August 19, 2016. (Changes may still occur before final publication online and in print.) Changes may still occur before final publication online and in print Annu. Rev. Environ. Resour. 2016.41. Downloaded from www.annualreviews.org Access provided by University of Washington on 08/30/16. For personal use only.