Greening and performance relativity: An application in the shipping industry

Shipping activities involve physical movement of cargoes from production to consumption sites. Although shipping operations are beneficial to global trade as well as economic development of countries, the related activities can cause environmental harm, e.g., CO2 emissions and ballast water discharge. As a result, public concerns about the environmental damages caused by shipping activities in servicing international trade are on the rise. To balance environmental protection and business performance improvement, shipping firms should pay more attention to the environmental and financial ramifications of their business routines. This study proposes the concept of Greening and Performance Relativity (GPR) and uses an input–output analytic approach to investigate how greening operations are related to firm performance in shipping operations. We present theory-driven arguments on the link between environmental and financial performance outcomes and empirically validate them with survey data collected from shipping firms. We also examine application of the GPR concept using survey data from the shipping industry in Hong Kong. Our analysis results show that there is a positive association between greening and firm performance in shipping operations. The results also indicate that shipping firms possess reasonably good capability in the business routines of “company policy and procedure”, “shipping documentation”, “shipping materials”, and “shipping design for compliance”.