Environmental Business Strategy: the Portuguese Case Rui Vinhas Da Silva 1 * and Natalia Teixeira 2 1 Manchester Business School, UK 2 ISCEM, Lisbon, Portugal ABSTRACT This study focuses on the adoption of environmental management systems and cor- porate social responsibility reporting as mechanisms for creating a differential advan- tage, looking at how different stakeholders in an organization perceive the importance of instituting these mechanisms as determinants of market success. The paper then aims to focus on environmental business strategy and corporate social responsibility reporting in companies, rather than prescribing policy for the entire sector. In so doing it postulates that compliance with market requirements on environmentally related issues, by instituting proper environmental management mechanisms and corporate social responsibility reporting, is a pre-requisite for accep- tance of the firm and its products in the market. The paper is methodologically based on a set of 60 interviews conducted with various agents in the Portuguese textile industry, ranging from policy-makers to industrialists and NGOs, with a view to determining differences in perception between the various stakeholders. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment. Received 15 July 2003; revised 21 September 2005; accepted 17 October 2005 Keywords: environment; policy; stakeholders; textiles; strategy; social responsibility; government and industry Background T HE TEXTILE SECTOR IS ONE OF THE MOST IMPORTANT IN INDUSTRY AND PLAYS A CRUCIAL ROLE IN the Portuguese economy. It is one of the largest exporting sectors in the country and with tourism constitutes a significant proportion of the country’s exports. It is a sector that has two main peculiarities: on the one hand the structure of property is highly fragmented with many companies in the market, albeit concentrated in a relatively small geographic area. On the other hand the structure of employment is very concentrated, sometimes with entire families working in one com- pany with all the predictable negative social consequences arising from this, whenever and increasingly Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment * Correspondence to: Rui Vinhas Da Silva, Manchester Business School, Booth Street West, Manchester M15 6PB, UK. E-mail: rvdasilva@man.mbs.ac.uk Business Strategy and the Environment Bus. Strat. Env. 17, 208–218 (2008) Published online 22 March 2006 in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/bse.512