Seminario 23-11-2015 Regina Viviane

Journal of Cleaner Production xxx (2015) 1e14
Contents lists available at ScienceDirect
Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro
Green initiatives: a step towards sustainable development and firm's

performance in the automobile industry
Gyaneshwar Singh Kushwaha 1, Nagendra Kumar Sharma*
Department of Management Studies, Maulana Azad National Institute of Technology, Bhopal, M.P., India
a r t i c l e i n f o a b s t r a c t
Article history: The automobile sector is rapidly increasing its market share worldwide in recent years. It is because of
Received 19 April 2014 various business strategies by automobile manufacturer such as more focus on small cars and fuel-
Received in revised form efficient cars having a low market price that are targeted to capture the maximum market. But due to
30 November 2014
increasing market share of the automobile sector there are several environmental issues are also arising
Accepted 9 July 2015
such as carbon emission, global warming, etc. In such a scenario, automobile manufacturers are facing
Available online xxx
dual pressure one, to save the environment and another is to maintain the performance of the firm in the
long run. The performance of the firm can be judged on the basis of financial, operational and marketing
Keywords:
Green Supply Chain Management (GSCM)
capability of the firm. This paper develops an approach towards the adoption of the green initiatives at
Automobiles the firm, and also tries to build a relationship between the performance of the firm and sustainable
The environment development through the adoption of green initiatives. The paper would discuss various green initiatives
Green initiatives such as green marketing, green supply chain management, green innovation, etc. which firms are
Sustainable development adopting. The study would focus on the facts and opportunities of green initiatives for the success of the
firm as well as sustainable development. The paper is based on the exploratory research, and extensive
literature survey has been done to bring the findings of the study.
© 2015 Elsevier Ltd. All rights reserved.
1. Introduction pressures (Zhu et al., 2007). In such a scenario, the global auto
market is planning to escape from this situation so that the per-
In recent years, the automobile market is increasing rapidly not formance of the firm and the target of sustainable development can
only in Europe and America but the rest of the world. Due to the rise be achieved. Firms are moving on and thinking beyond conven-
in the market demand worldwide, automobile manufacturers are tional functions and adopting green initiatives such as green
continuously involved in the production process, and reaping high innovation, eco-production, green supply chain management, etc.
sales. On the other hand, these manufacturers are facing dual to develop and implement such strategy, (Ar Ilker, 2012). Due to
pressure. The first one is to comply with the environmental norms hike in the global fuel prices and increasing carbon emission, the
of the country, for the sustainable development and secondly to automobile sector is a very significant concern both for customers
maintain the performance of the firm in the long run. Controlling and government (KPMG, 2010). The performance of the firm,
carbon emission is the biggest challenge for these automobile especially in the automotive sector, is mainly based on the fuel
manufacturers. These firms are facing cost and complexity pressure prices, environmental issues, etc. . The customer does not buy those
created by the tightened environmental norms, and the firms are products that consume more energy in developing countries like
much more investing on R&D to develop products that can less or India & China. On the other hand, if they emit carbon they have to
no harm to the natural environment (McKinsey and Company, pay more may be in the form of extra fee or penalty depending
2013). In developing a country like China, it can be observed that upon the regulation of a particular country. The US currently ac-
it is one of the biggest automobile markets and is also facing these counts for 18 percent of the total global carbon emissions and
planning to decline at about 15 percent till 2035 (Congressional
Budget Office, 2013). When firm bears the extra tax of the carbon
* Corresponding author. Tel. þ91 9009697291. emission, it directly goes on to the customer's pocket and later on
E-mail addresses: [email protected] (G.S. Kushwaha), nagendrasharmag@
gmail.com (N.K. Sharma).
the customer start avoiding such kind of purchase and also, let other
1
Tel. þ91 9479540151. well-wisher not to buy such things (Matsukawa, 2012). Here the
http://dx.doi.org/10.1016/j.jclepro.2015.07.072
0959-6526/© 2015 Elsevier Ltd. All rights reserved.
Please cite this article in press as: Kushwaha, G.S., Sharma, N.K., Green initiatives: a step towards sustainable development and firm's
performance in the automobile industry, Journal of Cleaner Production (2015), http://dx.doi.org/10.1016/j.jclepro.2015.07.072
2 G.S. Kushwaha, N.K. Sharma / Journal of Cleaner Production xxx (2015) 1e14
market share of such a product starts declining, and the need arises extra burden and may be recovered by selling their products in
of adoption of green initiatives that can contribute to the perfor- costlier manner (Penna and Geels, 2012). Those customers who are
mance of the firm and sustainable development. Green product price sensitive like customers those who reside in developing
innovation is positively associated with the performance of the firm countries, like India and other neighboring countries, may ignore
as people are much more focused on environmental issues and such product due to its higher price. In this case, it is paramount to
when they buy an eco-product they can take the advantage of both understand that whether the consumer behavior is changing to-
cost and environmental protection (Lin et al., 2013). The huge ward paying a higher price for the product, which is eco-friendly or
industrialization in many developed, and developing countries safer for our environment (Chan et al., 2012a). In the context of the
shows positive sign of economic growth. But it is an environmental automobile sector, if we see the Indian consumer, they are some-
threat also, and hence there is a need for environmental business times ready to pay a bit higher price, if their vehicles are going to
strategies, which not only develop the company but also move to- save some money in terms of fuel, or for the purchase of alternative
wards sustainability (KPMG, 2010). In a recent survey it is found fuel option such as LPG (Liquified Petroleum Gas), CNG (Com-
that ninety-two percent of the buyer think about fuel efficient ve- pressed Natural Gas), and Battery powered etc. Therefore, if we see
hicles and seventy-three percent of the customers consider about the recent trends in Indian automobile, we find that most of the
eco-friendly products, whereas around forty-seven percent of the firms much more focusing on the eco-friendly cars and attracting
customer want a car that is based on alternative fuel technologies their customers successfully. Maruti Suzuki, Hyundai, Mahindra &
(KPMG, 2014). There are many world's major automobile players Mahindra and many more companies in India are focusing on the
who are investing huge amount in research and development, such production of greener cars (Shrikanth and Raju, 2012). But still there
as leading automobile manufacturers as Honda, Toyota, GM, Ford, is no definite answer to the question, are these customers think
Daimler-Chrysler, Suzuki, Hyundai, Tata, etc. In 2008, North Amer- about the environment or they simply think about their pockets.
ican Environmental Report, Toyota, the car manufacturer, states According to research, it is said that if the product is environmen-
that they spend an average of nearly $1 million an hour on research tally safe people are ready to pay higher prices (Essoussi and Linton,
and development to develop the cars and technologies of the future 2010). But it is also a matter of research to know that for which
(Brecard, 2011). Apart from R&D efforts these automobile firms also product category, people can pay a higher price. Because when we
involve in other green initiatives such as Green Supply Chain talk about automobile, people pay higher only if the product is
Management (GSCM), so that they can reduce the cost and be a part going to give them back in terms of savings (Sierzchula et al., 2012).
of sustainability programs by keeping better firm performance. Now it is important to consider that, automobiles are the primary
GSCM is the prominent feature of leading automobile manufacturer source of carbon emission, and hence there is more strict govern-
and it emphasis on life cycle costing, asset efficiency, and waste mental pressure on automobile firms for controlling carbon emis-
reduction and service innovation and recycling. GSCM stimulates sion. These firms are continuously involved in reducing it, but the
product and service innovation, improves asset utilization, and cost is also an obstacle many times and firms are puzzled because
deepens customer relationships and service levels through a shared they have to minimize the product cost due to cut throat compe-
focus on reducing waste and cost (Van den Broek and Van den tition. These firms are involved in controlling carbon emission
Broek-Serle , 2010). GSCM not only reduce the waste and efforts through investment in R&D due to governmental, environmental
but also encourage the performance of the firm. As it also help in and social pressure, and in the middle of that they also have to
cost reduction through reverse logistics and maintains the effi- maintain the firm performance (KPMG, 2010). Here the purpose of
ciency of the firm especially in the field of supply chain manage- this paper is to analyze the relationship between firm performance
ment in a sustainable manner (Chan et al., 2012b). Some of the and green initiatives on the basis of extensive literature and also to
automobile firms are also focusing on green marketing. According know the impact of green initiatives on the sustainable develop-
to the American marketing association, from the environmental ment. There are various authors across the globe, who have criti-
point of view, green marketing is, “The efforts by organizations to cally worked on this issue, and given their best results. In the same
produce, promote, package, and reclaim products in a manner that way, we have compiled all these research papers and analyzed the
is sensitive or responsive to ecological concerns”. Green marketing problem, to bring some more meaningful findings.
evolves from the developed countries in Europe and America, due
to various strict environmental rules and regulation for the in- 2. Review of literature
dustries. In this scenario firms have started to develop a green
marketing for the product which includes product planning, pack- Approximately hundred research papers have been reviewed
aging, green advertising, green pricing, and eco-labeling in the and mostly were chosen after the year 2010 and onwards so as to
greenest way (Lampe and Gazda, 1995). Green marketing is also bring the novel outcomes of the paper.
known as ecological marketing or sustainable marketing etc.
(Polonsky and Rosenberger, 2001). Many automobile firms started 2.1. Firm performance
working on it and as the consumer behavior is also a concern for the
environment and they often keeps the environment in top priority Firm performance is mainly based on various functions of the
while purchasing any product. Adoption of green marketing is a organization, such as production function, operational function,
favorable indicator for firm performance many times, and it also and marketing function, etc. Nowadays firms are facing different
contributes to the sustainable development (Chan et al., 2012a). But pressures that affect these organizational functions (Polonsky and
it is also true that sustainability is not a short-term goal that can be Rosenberger, 2001). Market performance, financial performance,
measured easily, therefore, what factors contribute more to the learning and reinvestment performance are some of the major
sustainable development is very difficult to claim. On the other performance outcomes of the firm (Morgan, 2012). Manufacturing
hand studies that have been taken place on this issue indicate that in emerging industrial nations, such as India, Indonesia, Malaysia,
there is a definite relation between green marketing and sustain- Philippines, Thailand and Vietnam, has grown significantly in
able development (Lin et al., 2011). But when we talk about, per- recent years. However, this has come at an environmental cost.
formance of the firm and its connection with these green initiatives, Manufacturers in these nations are facing increasing pressures to
it's a matter of a systematic research as adoption of green initiatives produce products in an environmentally sustainable manner,
also another investment for the firm and it can be treated as an particularly those who compete in the global market and have to
G.S. Kushwaha, N.K. Sharma / Journal of Cleaner Production xxx (2015) 1e14 3
comply with foreign environmental standards and regulations. its performance in the eco market. (Gan, 2003). According to data
Consumers are also becoming more critical of the manufacturer's from Automotive Component Manufacturer's Association (ACMA),
environmental performance (Xu et al., 2013b). Greening occurs due the passenger vehicle production in India, touched 3.23 million
to dual pressure in the business, i.e. external and internal. External units in 2012e13 and is expected to reach 10 million units by
pressure consists of satisfying consumer demands, reacting to 2020e21. The industry is estimated to grow at a CAGR of 13 percent
competitor greening actions, channel/supplier requests to modify during 2012e2021. Also, the industry recorded exports worth US$
inputs whereas internal pressure are cost and philosophy (Polonsky 9.3 billion in 2012e13 and is projected to touch US$ 30 billion by
and Rosenberger, 2001). 2020e21, (Auto component industry in India, 2013). In India com-
pany like Indian Oil is focusing on CNG (compressed natural gas),
2.2. Sustainable development Auto gas (LPG), ethanol blended petrol, biodiesel, and Hydrogen
Energy (Mishra and Sharma, 2010). Many of the firms have been
On the other hand, sustainable development is also one of the trying to promote a greener image, some of them are not able to live
primary concerns for these firms, especially for automobile firms, up to their claims so due to the consumer skepticism. Working with
those who are mainly known for carbon emission and other the Japanese Government, Toyota started a program whereby
pollution (Gan, 2003). McCann-Erickson,(2007) defined that: Sus- people purchase transportation without owning a car. Toyota is
tainability is a collective term for everything to do with re- trying to build a green image in a very significant way like changing
sponsibility for the world in which we live. It is an economical, their engines in hybrid combustion electric (Polonsky and
social and environmental issue. It is about consuming differently Rosenberger, 2001). Toyota is the on the first position in innova-
and consuming efficiently. It also means sharing between the rich tion towards sustainability. Toyota has also developed eco-division,
and the poor and protecting the global environment while not in fact, Toyota is the best global green brand for the third consec-
jeopardizing the needs of future generations (Jones et al., 2008). utive year as it produces hybrid automobiles and implement
The Brundtland Report defined sustainable development as various green strategies also. Another manufacturer as Ford, Honda,
development that meets the needs of the present without Nissan, and Volkswagen are also running their vehicles in the same
compromising the ability of future generations to meet their needs direction of the eco-friendly way. The demand for green vehicles is
(Adam, 2006). According to David Pearson, Deloitte's Global Sus- also rising, which motivates these manufacturers to behave in a
tainability Leader, “Sustainability continues to assert itself on the sustainable manner. They are contributing to providing a safeguard
business agenda. Customers and stakeholders are holding com- to the environment and on the other hand complying with regu-
panies more and more accountable for sustainability performance, lations (Inter-brand, 2013). The first series of the all-electric Tesla
and businesses are working hard to ensure that their external Roadster a California-based company sold out immediately after its
perception reflects their internal efforts. Leading global brands are introduction in 2008. Tesla aims at market expansion by offering
thus showing increased focus and innovation in the sustainability the car in Europe by introducing all-electric sedans (Eggers and
realmdleading to improved programs and reporting” (Inter-brand, Eggers, 2011). Companies are therefore advised to reinvent them-
2013). The three principal pillars of the sustainable development selves in terms of strategic aims, product design, overall visible
are the economy, society and environment (Adam, 2006). As re- activities, and of course, marketing and marketing communication
ported by UN global compact in 2010, sustainability has become the tactics, especially in the gasoline products (Singh et al., 2011). As
mantra for companies seeking to create a competitive advantage in reported by Nissan Motors, the Nissan Leaf is the first 100 percent
the global marketplace. Recent interviews with over 750 CEOs from electric, no gas, no tailpipe vehicle. It uses a technology called an
around the world revealed that, 93 percent feel that implementing inverter, which works similar to a fuel pump and pumps, electricity
sustainability programs that mesh with their core businesses stored in a battery to power the vehicle. The customer response
would be critical to the future success of those businesses (Borin towards this car is overwhelming many customers have already
et al., 2013). Companies are seen as key players on the societal booked their vehicle, and this high number of bookings has
path towards sustainability. It requires operational implementation exceeded everyone's expectations (Xia and Tang, 2011).
far beyond the mission statement. It is necessary to find practical
approaches to sustainable development inside the companies 2.4. Green supply chain management and reverse logistics
themselves, as well as regarding their supply chains, this is what
something has been done by Volkswagen (Koplin, 2007). Green initiatives like Green Supply Chain Management (GSCM),
mediates the effect of environmental orientation on corporate
2.3. Green initiatives and automobile sector performance. The GSCM activities such as green purchase and in-
vestment recovery have the strongest impact on organizational
Many automobile firms are now engaged in adopting green performance (Chan et al., 2012a). There are even various barriers
initiatives in order to reduce the pressures and for better image by that affect the GSCM approach in the firm such as market compe-
keeping their business in a sustainable manner, such as green tition, uncertainty, cost implications, etc. Whereas it has been
supply chain management, reverse logistics, green marketing, found that the top level barrier is unawareness of customers and
green advertising and use of eco-labeling (Smith, 2010). In the lack of government intervention is the bottom level barrier,
automobile segment there are various players who are involved in therefore removal of these barriers will help in successful imple-
producing AFV's (Alternative fuel vehicles) continuously and other mentation of GSCM in Indian automobile industry (Luthra et al.,
manufacturers are also planning to come in this segment as the 2011). It has been observed that GSCM has a positive relationship
market is expanding due to environmental concern and sustain- with the firm performance (Chan et al., 2012a). Green Supply Chain
ability issues (Sierzchula et al., 2012). From 1980 to 1997, total CO2 Management (GSCM) is also one of the critical issues that organi-
(Carbon dioxide) emissions in China increased 1.4 times from 1.5 to zations are focusing today due to various external and internal
3.6 billion tons. China contributes 15% to global CO2 emissions. If pressures. The encouraging finding both green supply chain ini-
the trend of CO2 emissions continues at the current rate, China may tiatives certification and direct investment, enhance manufacturing
become the world largest CO2 emitter by the mid 21st century. And performance (Lin and Sheu, 2012). The influence of green initiatives
to reduce the carbon footprints China is adopting green techno- is found to be beneficial in the supply chain management, such as
logical innovation in its automobile sector, which will also enhance ecological conservation and cost savings (Azevedo et al., 2011). The
performance measures found in the automobile green supply chain should be seen by managers as an excellent strategy, which will not
management are very crucial and having its validity, hence GSCM in only reduce cost and optimize results but also contributes to cre-
the automobile gives fruitful results to the firm (Olugu et al., 2011). ation of differentiation advantages, which again will lead to higher
Automobile firms in some developing countries such as China or returns (Fraj et al., 2011). The findings confirm that managers
Malaysia have implemented GSCM and started to learn experiences indirectly play a fundamental role in the design and development
from international partners (Lin et al., 2011). The marketing efforts of green marketing strategies through the integration of environ-
are also focusing on recycling by implementing their GSCM mental values into the organizational culture. They also reveal that,
approach in Europe and US to maintain the sustainability through while market-oriented initiatives directly determine economic
their firm sustainability programs (Sharma et al., 2010). Due to performance, internally oriented activities indirectly influence
increase in the industrialization especially in the automobile sector financial results through the improvement of the firm's environ-
creates environmental burden and thus there are excellent oppor- mental performance (Fraj et al., 2013). Implementation of green
tunities for GSCM in automobile industry in order to gain economic marketing is the requirement of the automotive industries, but
performance and sustainable development (Lin et al., 2011). many times companies adopt it due to making their positive image
Greening the supply chains is one important strategy for the Chi- in the market and society, sometimes due to anti-environmental
nese automotive industry's sustainability, environmentally, image ruins business poorly (KPMG, 2010). Green marketing gives
economically and socially (Zhu et al., 2007). GSCM and firm per- a clear view of the sustainability (Peattie and Crane, 2005). At
formance have a significant relationship (Hervani et al., 2005). present firms are undertaking environmental improvements in
Firms that announce GSCM initiatives are likely to show the sig- their products for a number of reasons, including a desire to be
nificant positive impact on their stock prices (Bose and Pal, 2012). more socially responsible or a desire to cater to the needs of socially
German automotive suppliers are one of the strict environmental responsible consumers who want to purchase less environmentally
compilers, and they always focused on quality, cost, and harmful products (Polonsky et al., 1998). Customers agree to that, in
environment-friendly process as well as time. German market is future more and more consumers will prefer green products
robust due to its environmental policies. If the OEMs (Original (Saxena and Khandelwal, 2008).
Equipment Manufacturers) will not adopt greening the business General Motors invests $2.5 billion in making the business green
they can lose the market or have to face the shutdown of the en- (Gleim, 2013). The main types of green strategies gleaned from the
terprise, because the environmental concern is on the highest literature are: (1) green innovation, (2) greening the organization,
priority in most countries (Caniels, 2013). Auto component manu- and (3) green alliances (Cronin et al., 2011). Study also confirms the
facturers play a significant role in a country's economy and should general claim that inter-organizational collaborations can be
begin adopting GSCM as their strategy (Mathiyazhagan and fruitful for a firm's environmental performance, thus those com-
Govindan, 2013). The evidence shows that government regula- panies who are seeking to improve their environmental perfor-
tions and legislations and reverse logistics are the key drivers to mance they must join hands together in order to share their
achieve collaboration between two, product designers and sup- knowledge, capabilities and innovative efforts to bring something
pliers, to reduce environmental impact which leads to the practical new (Albino et al., 2012). Not only in today's era but decades back,
implementation of GSCM (Diabat and Govindan, 2011). Green innovation is one of the important aspects of the performance of
reverse logistics is one of the crucial elements of GSCM, and the firm. There is a positive relationship between cost leadership,
adoption of green reverse logistics indicates firm's eco-friendliness, administrative innovation and process innovation (Yamin et al.,
which helps in creating consumer concern for sustainable devel- 1997). Businesses need to adopt “eco-advantage”, which takes the
opment (Hazen et al., 2012). concept of sustainability in business further to include economic
and stakeholder gain. The small medium enterprises (SMEs) are the
2.5. Green marketing and firm performance key drivers in the backbone of an economy and therefore adoption
of sustainable strategies, innovative initiatives, and green concepts
Green marketing can be viewed as adherence to ethical and are an important concern for them (Oxborrow and Brindley, 2013).
social responsibility requirements in marketing (Dheeraj and
Vishal, 2012). Green marketing is strongly related to the building 2.6. Green product innovation
corporate image, which further enhances the capability of the firm
in all aspects (Ko et al., 2013). Green marketing and use of sus- Innovations and transformational leadership are also one of the
tainable technologies are imperative multiplier in the sustainable paramount factors in the performance of the firm (Samad, 2012).
development and financial performance (Fisk, 2010). The eco- Market demand is positively related to the firm performance and
marketing campaign can positively change the behavior of new green product innovation process, if the market demand is sus-
vehicle buyers, but that eco-information must be repeated to make tainable towards the green product, it will definitely lead towards
sustainable changes in behavior. Findings also confirm that the the success of the firm (Lin et al., 2013). Those firms who are
positive effects of eco-information, also perform as a means to use involved in innovation and green design of the product are better in
it in increasing green consumer behavior (Siriwardena et al., 2012). their firm performance as compared to those who are less or not
Marketing strategy alignment positively affects supply chain per- focusing on this part (Camison and Lopez, 2012). The firm must pay
formance that positively influences the marketing performance of attention to their products and economic performance in addition
the organization, and improved marketing performance positively to environmental performance. Many motorcycle firms in Vietnam
affects the financial performance of the organization (Green et al., have already implemented actions to integrate product innovation
2012). There are many words that most convey a green image to improve their organizational performance (Lin et al., 2013). The
include eco-friendly, recycled, and green and the package feature Green Product Innovation has the positive effect on firm perfor-
that most denotes environmental friendliness is the recycling mance and competitive capability (Ar Ilker, 2012). There is one
symbol. Items that influence the millennial perception of envi- more step towards sustainable development that is, Resource
ronmental friendliness are company's reputation and the com- Constrained Product Development (RCPD); it is the process of
pany's advertising (Smith, 2010). Researchers support that there is a developing new products that use minimal resources and are
definite link between proactive environmental strategies and affordable to a broader market. RCPD helps in the development of a
organizational performance, and in the same way green marketing new product at the lowest possible cost. It gives intended benefits
of lower prices and higher market penetration of new products, and advantage for succeeding in today's highly challenging and dy-
it also provides unintended benefits include the economical use of namic global markets (Saxena and Khandelwal, 2012).
resources and thereby conservation of scarce resources and which
again leads to the sustainable development (Sharma and Iyer, 2012). 2.10. Other facts and arguments related to green initiatives and firm
performance
2.7. Green advertisement
Recently more firms giving attention on the environmental is-
Green advertisement or green communication also helps in sues and hence the word like green, eco, environmentally-friendly,
attracting the consumer, but there must be no skepticism in the sustainability and earth-friendly are very common in initiatives in
communication content (Grimmer and Wooley, 2014). Customers organizations now days (Chen et al., 2013). The environmentally
are often attracted towards the green product, because of green committed organization can be more reliably considered to have
advertisement. Green advertisement many times compels the well developed systems and initiatives of environmental manage-
consumer for buying a green or eco-friendly product (Smith, 2012). ment, have higher levels of environmental performance and be
WOM (word of mouth) is one of the important mean to promote more likely to respond to its customer's environmental perfor-
the green products and awareness among consumers (Chen et al., mance requirements (Simpson et al., 2007). While environmental
2013). Findings confirm the positive effects of eco-information, activists have long advocated the benefits to the natural environ-
thus providing an opportunity to use it as an effective means to ment of greening marketing initiatives, many managers have
increase consumers green behavior (Siriwardena et al., 2012). remained unconvinced that such investments make strategic and
Making relevant information available at the point of purchase can financial sense for their firms (Leonidou et al., 2012). Researchers
further help to educate consumers about the benefits of choosing a also suggested that the development of environmentally based
greener lifestyle (Borin and Cerf, 2011). Results of the study reflect firms can be possible if the government will maintain and aware of
that industries in India, in general, have a positive view of prac- the environmental laws (Mostafa, 2009). The Indian Government
ticing green philosophy (Saxena and Khandelwal, 2012). The results has also done its efforts in promoting green marketing and eco-
suggest that green goodwill may have a positive effect on the firm's friendliness by way of banning plastic bags from daily use, help-
profits via output price (Kristrom and Lundgreen, 2003). The pos- ing its automotive industry to develop greener vehicles by sup-
itive environmental performance creates a positive image of the porting hybrid and electric vehicles (EVs), by investing in greener
company. Therefore, implementing green marketing strategy may cars (Shrikanth and Raju, 2012). Automobile firms are focusing
be beneficial for the firms (Camino, 2007). mainly on the new consumer; new car consumer is more receptive
to the social pressure (Dijk and Yarime, 2010). Due to the financial
2.8. Eco-labels crisis the car makers moved to the small car manufacturing to
reduce cost and increase sales (KPMG, 2008). Several car manu-
Eco-labels have emerged as one of the dominant means of facturer argued against the environmental law that devices and
marketing communication for the green credentials of products, technologies used to reduce the emission, costs high and due to that
but a sustainable production and consumption system is still far customer have to bear the additional cost, which further narrow
away (Rex and Baumann, 2007). The eco-label or environmental down the market size of the automobile. The automobile manu-
label would prove itself a useful instrument based on cooperation facturer are facing the various pressures associated with environ-
and self-commitment on the part of the industry (Panda and ment, law, society and firm performance (Penna and Geels, 2012).
Goswami, 2009). An eco-label is a tool for supporting decision- Fuel efficiency and the environmental profile of products continue
making concerning environmentally significant products to be considered by companies the most significant consumer
(Thogersen et al., 2010). Therefore, there is a compelling urge for buying issues (KPMG, 2010). Ecological responsibility affects
companies to promote green branding, eco-labeling and green manufacturing firms both economic and environmental perfor-
packaging strategies to encourage a greener pattern of consump- mance, and ecological responsiveness are critical due to respond
tion among consumers (Juwaheer et al., 2012). Visual and verbal ecological changes a sustainable firm's orientation. Environmental
representation of eco-labels gives a positive impact on the con- response and sustainable direction generate initiatives concerning
sumer buying decisions (Tang et al., 2004). internal and external activities of the firm (Koo et al., 2013). Envi-
ronmental management projects performed by a California auto-
2.9. Competitive advantage and firm performance mobile assembler to investigate the major determinants and
categories of its worker's contributions to the success of the com-
The importance of green market analysis and green market pany's projects and most environmental management projects
development handles competitive advantage and financial perfor- were conducted by teams of environmental managers, engineering
mance of the firm (Chan et al., 2012a). GSCM and other greening workers, suppliers, and operational workers (Jabbour et al., 2013).
strategies help in building consumer loyalty, willingness to pay On the other hand the end-of-life (ELV) directive has been intro-
more for such products and competitive advantage (Hazen et al., duced by the European Union (EU) to make manufacturers reduce
2012). The sustainable competitive advantage lies in the techno- wastes from vehicles at the end-of-life stage and to protect the
logical distinctiveness competencies and other capabilities of the environment by promoting collection, reuse, and recycling of
firm, therefore a manager must focus on the organizational components of such vehicles. The ELV Directive may have heralded
learning, organizational innovation as these skills and strategic the start of a new era of waste management legislation for durable
capabilities leads to better performance of the firm (Bolívar-Ramos goods worldwide (Kuo, 2012). A product with reused or recycled
et al., 2012). Some past research also focused on the early adoption content with little functional risk and a relatively high consumer
of green initiatives, which leads to the competitive advantage and willingness to pay (WTP) would be an attractive item to have
can contribute to the firm performance (Zhu and Sarkis, 2004). associated with a corporation's identity. As the product will not only
They feel green will help them in gaining the competitive edge and bring in a higher price, and presumably be more profitable, but will
will support them in sustainable growth. Industries that have a also enhance the sustainability and the external image of the cor-
positive attitude towards greening have taken some measures and poration (Essoussi and Linton, 2010). Thinking about business that,
initiatives in this direction to establish a sustainable competitive is too small or too service-based to benefit from going green, or
Table 1
Parameters and their descriptions.
Author Parameter Description
Ilker (2012); Chan et al. (2012a); Lin et al. (2013); McKinsey and Company Sustainable development Sustainable development is the use of natural resources so as
(2013); Lin and Sheu (2012); Polonsky et al. (1998); Xu et al. (2013a) they can meet the present and future needs of the people, and
the industries highly require it.
Van den Broek and Van den Broek-Serle (2010); Chan et al. (2012a); Green supply chain Procurement of raw material to the final delivery of product by
Chan et al. (2012a); Luthra et al. (2011); Lin and Sheu (2012); management the company, ensuring the environment must not be harmed.
Azevedo et al. (2011); Olugu et al. (2011); Lin et al. (2011); Sharma Such as green packaging etc.
and Iyer (2012); Zhu et al. (2007); Hervani et al. (2005); Bose and Pal
(2012); Mathiyazhagan et al. (2013); Diabat and Govindan (2011);
Dheeraj and Vishal (2012); Hazen et al. (2012)
Dheeraj and Vishal (2012); Hazen et al. (2012); Chan et al. (2012a); Reverse logistics Reverse logistics is a step towards the end of life products, in
Smith (2010) recycling, reuse, etc. and maintaining sustainability.
Lampe and Gazda (1995); Polonsky and Rosenberger (2001); Chan et al. Green marketing The efforts by organizations, to produce, promote and deliver
(2012a); Lin et al. (2011); Penna and Geels (2012); Smith (2010); the product in an ecological manner.
Dheeraj and Vishal (2012); Ko et al. (2013); Fisk (2010); Sriwardena
et al. (2012); KPMG (2010); Peattie and Crane (2005); Saxena and
Khandelwal (2012); Shrikanth and Raju (2012); Kristrom and
Lundgren (2003)
Ilker (2012); Lin et al. (2011); Lin et al. (2013); Van den Broek and Van den Green product innovation Innovation of product, which is suitable for the environment.
Broek-Serle (2010); Inter-brand (2013); Gan (2003); Cronin et al. (2011)
Smith (2012); Grimmer and Wooley (2012); Chen et al. (2013) Green advertisement Marketing communication, this focuses on the ecological
features of the product.
Lampe and Gazda (1995); Smith (2012); Polonsky et al. (1998) Eco-labeling The logo or the symbol which depicts the ecological concern of
the product.
Borin and Cerf (2011); Chan et al. (2012a); Hazen et al. (2012); Ilker Competitive advantage. The uniqueness of the product or company's features, which can
(2012); Ramos-Bolivar et al. (2012); Zhu et al. (2007); Saxena and be enjoyed further over competitors.
Khandelwal (2008)
Borin and Cerf (2011); Chan et al. (2012a); Hazen et al. (2012) Firm Performances The overall performance of the firm including, operational,
financial,
marketing etc.
waiting for the hype about green and sustainability to die down, How green initiatives will affect the firm performance and
then the business is missing an opportunity to chart an upward sustainable development?
course for the company. The green movement has been trans-
formed from a cause to save our environment into a fully fledged,
vetted economy (Van den Broek and Van den Broek-Serle , 2010). 3.2. Objectives of the study
On the basis of the above literature review, we have identified
the specific parameters for the study and summarized in tabular The study is focused on some major objectives, which will
format, in Table 1. provide valuable information to provide a solution to the problem
of the research. Following are some objectives:
3. Research methodology
(i) To establish the relationship between automobile firm's
green initiatives and firm performance.
The paper is based on exploratory research techniques and is
(ii) To establish the relationship and to know the impact of
based on the systematic literature review. The exploratory method
automobile firm's green initiatives on sustainable
is used because there are less number of researchers available in
development.
this field of study, and here we tried to explore the facts and figures
with the help of relevant research. We have utilized the tool of
systematic research review with the help of various research pa- 4. Development of conceptual model
pers, which are not only renowned but also helped us in exploring
the required data and figures. Systematic research review plays a The conceptual model can be explained graphically, or in
significant role in the initiatives that are evidence-based (Tranfield narrative form, the main things to be studied, the key factors,
et al., 2003). Systematic research review is the process of identi- concepts or variables (Vaughan, 2008). The conceptual model or
fying the appropriate tracking of decisions, procedures and con- framework is developed with the help of existing knowledge. On
clusions made by the researchers (Cook et al., 1997). In order to the basis of an extensive literature review, there is a need for the
bring the meaningful and most updated study, approximately more development of the conceptual model to see the situation in
than hundred research paper has been reviewed from reputed in- graphical presentation and to look forward to solving the problem.
ternational journals across the world from the year 2010 and on- It is also required to see the validity of the said model with the help
wards and also few papers selected randomly on the basis of the of literature review. Here to develop this model, the systematic
demand of the study. The paper has been classified on the basis of literature survey has been done related to the title of the study. It
the theme and further the most suitable findings, which is useful has been trying to connect the variables systematically so that the
for this study has been chosen. The classification has been also done objective of the problem can be better understood and solved. In
on the basis of most focused variables in the studies. this model the green initiatives are directly affecting the sustain-
ability and firm performance in the automobile industry, according
3.1. Problem definition to the study the model has been propounded in the paper, which
provides ease in bringing the outcomes of this research in a sys-
The problem is much more based on the environment and tematic way. This model would be beneficial for the research. The
strategic. The actual problem in this study is: model is given in the Fig. 1.
- Green markeƟng
Green - Green Supply Chain
Management.
IniƟaƟves (GSCM)
- Green product
innovaƟon
- Green adverƟsement
- Eco-labeling
H1 H2 -Reverse logisƟcs etc.
H1
Firm's Sustainable
performance H3
development
OperaƟonal performance ConservaƟon of

Environment
Financial performance
Social development
MarkeƟng performance
Economic development
Environmental
performance. (In sustainable manner)
Fig. 1. Sustainable development and firm performance through green initiatives.
5. Hypotheses development providing valuable information, also gives appropriate evidence to

test the hypotheses. Most of the authors have discussed the
On the basis of the above model, various hypotheses has been particular issue and also given their findings on the basis of the
formed so that it can be tested further to focus on the study. research. All the relevant variables which is necessary for this study
Following are the hypotheses of the study. has been chosen from various research papers and mostly have
discussed about them in a uniform way towards sustainability and
H1.1: Green initiatives have the positive relationship with the performance by adopting the green initiatives in the automobile
firm's performance. industry.
H2.1: Green initiatives have the positive relationship with the On the basis of the Table 2 one more separate table (Table 3) has
sustainable development. been drawn, which shows how authors have identified and focused
H3.1: Firm performance, which is the outcome of green initia- on all the variables related to the green initiatives in their papers
tives have the direct relationship with the sustainable and also given importance to the firm's performance, sustainability,
development. competitive advantage, etc. It also shows that the prime concern
H3.2: Firm performance, which is not the outcome of green towards automobile industries and number of authors who have
initiatives have the positive relationship with the sustainable discussed its linkage to the green initiatives and performance of the
development. firm with the help of their rigorous research. To test these hy-
potheses, this table plays a critical role as it shows the number of
authors who are concerned with the selected variables of the study.
5.1. Hypotheses are testing To make this table more meaningful and useful, it has been drawn
by bifurcating each research paper and identifying the selected
Before testing the hypotheses there is a need to have a look variables for the study.
towards the depth analysis of the literature that has been reviewed. H1.1: Green initiatives have the direct relationship with the
These literature are also the base for this research paper. There is a firm's performance.
need for the structuring the literature review in a systematic way The hypothesis one regards the direct relationship with the
on the basis of various variables which has been taken in this study. firm's performance, to check this hypothesis, there has been several
It is a kind of filtration exercise of the articles that are found rele- research evidence found after the structured literature review in
vant to the study and pointing out the things that will strengthen in this context. Hundred papers has been reviewed, and approx thirty
proving the facts and also helps in testing the hypotheses more papers were selected from the automobile sector itself, which we
carefully. The Table 2 which is given below shows a summary of the can see in the graphical representation in Fig. 2. On the other hand
literature review, on the basis of some important variables. by analyzing various selected variables of green initiatives with the
The Table 2 shows the brief summary of the review and their help of the findings of the literature review, green initiatives such
significant findings, which strengthen the research paper by as GSCM & reverse logistics, green marketing, green product
Table 2
Variables and significant findings in research papers.
Authors Variables Major findings
Mckinsey and Company (2013), Zhu et al. (2007), Ar Ilker (2012), Studies on automobiles Automobile sector is the largest industry in the world, in all
KPMG (2010), KPMG (2014), Brecard (2011), Van den Broek and manners such as manufacturing, market share, demand etc. and has
Van den Broek-Serle (2010), Lampe and Gazda (1995), Chan, et al. the biggest claims towards carbon emission and other
(2012a), Shrikanth and Raju (2012), Sierzchula et al. (2012), Gan environmental issues across the world.
(2003), Smith (2012), Auto component industry in India (2013),
Mishra and Sharma (2010), Inter-brand, (2013), Luthra et al. (2011),
Olugu et al. (2011), Lin et al. (2013), Zhu, et al. (2007), Shrikanth and
Raju (2012), Penna and Geels (2012), Jabbour, et al. (2013)
Ar Ilker (2012), Chan et al. (2012a), Lin, et al. (2013), Mckinsey and Sustainable development Authors those who worked on in this regard, they found that the
Company (2013), Polonsky and Rosenberger (2001), Xu et al. steps towards greening the industry by the management would not
(2013a) only reduce the carbon emission but also move on for the
sustainable development.
Van den Broek and Van den Broek-Serle (2010), Chan et al. (2012a), Green supply GSCM is one of the very popular green initiatives which is used by
Chan et al. (2013), Luthra et al. (2011), Lin and Sheu (2012), chain management the several industries across the country and specifically automobile
Azevedo et al. (2011), Olugu et al. (2011), Lin et al. (2011), Sharma & reverse logistics sector. Reverse Logistics is one of the key elements of the GSCM and
and Iyer (2012), Zhu et al. (2007), Hervani et al. (2005), Bose and is highly used by automobile firms such as Toyota, Honda, and Ford
Pal (2012), Mathiyazhagan et al. (2013), Diabat and Govindan etc. These initiatives are cost effective and helpful in waste
(2011), Dheeraj and Vishal (2012), Hazen et al. (2012), Chan, et al. management.
(2012a), Smith (2010)
Lampe and Gazda (1995), Polonsky and Rosenberger (2001), Chan Green marketing Green marketing started from European and American countries in
et al. (2012a), Lin et al. (2012), Penna and Geels (2012), Lin et al. way back 1970's, due to the increasing pollution by the industries
(2011), Smith (2010), Dheeraj and Vishal (2012), Ko et al. (2013), and stricter environmental norms, the pressure arises and
Fisk (2010), Sriwardena et al. (2012), KPMG (2010), Peattie and industries started to adapt green marketing initiatives. The green
Crane (2005), Saxena and Khandelwal (2008), Shrikanth and Raju marketing initiatives are found profitable with some limitations.
(2012), Kristrom and Lundgren (2003)
Ar Ilker (2012), Van den Broek and Van den Broek-Serle (2010), Green product innovation Innovation is the key to success in today's business scenario, and
Inter-brand (2013), Gan (2003), Cronin et al. (2011) green innovation is something which not only helps in
differentiation but also helps in greening the industry, which
further helps in improving environmental performance of the firm.
Smith (2012), Grimmer and Wooley (2012), Chen et al. (2013) Green advertisement Green advertisement is one of the important part of green
marketing initiatives, which is for the awareness to the user or
customers about the green product in various ways. This is an
important exercise as the people are less aware about the eco-
product and suffering from consumer skepticism.
Lampe and Gazda (1995), Smith (2010), Polonsky et al. (1998) Eco-labeling Eco-labels helps customers in buying decisions related to the
products and also help in conveying the information to mass.
Borin and Cerf (2011), Chan et al. (2012a), Hazen, et al. (2012), Ar Competitive advantage Creation of competitive advantage is one of the challenging task for
Ilker (2012), Bolívar-Ramos et al.(2012), Zhu et al. (2007), Saxena every industry, because it helps in building the image and maximize
and Khandelwal (2008) profit share of the company, the studies have found that adoption of
green initiatives helps industries in enjoying competitive
advantage.
Borin and Cerf (2011), Chan et al. (2012a), Hazen et al. (2012) Firm Performances The performance of the firm lies in various activities of the firm,
such as operation, marketing, finance etc. This green initiative helps
in achieving all these activities successfully.
innovations has been discussed and contribution is 44.82%, 24.17% the ecological performance of the firm as well as these steps may be
and 34.48% respectively in all those papers that are based on the the strong reason towards the sustainable development, talking
study of automobile industry and green initiatives. These green specifically about the automobile industry it is seen in 29% of the
initiatives are used in papers and in order to check the relationship papers that were collected and reviewed because of the theme of
between firm performance it is found that 75.86% authors are fully the study, approx 86% authors have worked and found the result
agreed that, these green initiatives has the positive relationship satisfactory, adoption of the green initiatives for longer duration
with the firm performance. If we see in Table 2 it has been clearly leads towards the sustainable development, as green initiatives not
summarized from the various relevant studies that all the variables only bring profit in the organization but it also utilizes the optimal
that are known as green initiatives are fruitful for the company in or minimal resources in a greener way, which conserves lots of
terms of profitability and competitive advantage and both the natural resources in form of forest, energy, land, water and fuel, etc.
things are crucial for the performance of the firm. Finally in the If we see the table number 2, here it is clearly summarized that
light of the above discussion, it can be easily said that there is a there are various numbers of authors those who have found that
direct relationship between the green initiatives and the firm per- there is a positive relationship in between green initiatives. In this
formance and therefore hypothesis: 1.1 is accepted. way, it can be said that the hypothesis:2.1 is also accepted. In this
H2.1: Green initiatives have the positive relationship with the way, it can be said that green initiatives have the positive rela-
sustainable development. tionship with sustainable development.
To check the hypothesis number 2.1, there has been a various H3.1: Firm performance, which is the outcome of green ini-
analysis of papers by reputed authors who have done their research tiatives have the direct relationship with the sustainable
on this issue. There is some more important point to be noticed that development.
majority of the blames for pollutions, non-involvement or adverse The performance of the firm which is the outcome of the green
functioning towards the natural environment, goes to the in- initiatives, as discussed in this paper, there are 77% authors who
dustries. In the same way here in this study, it can be seen in Fig. 3 have examined and found positive results towards the green
that in hundred papers majority of the authors that is 78% have initiative based firm performance and sustainable development in
talked and found that the green initiatives can make the changes in the total research papers reviewed and 75% authors have agreed
Table 3
Showing various authors who worked on selected variables.
Authors Automobile Variables

sector
GSCM & reverse Green Green Eco-labels Green product Firm Sustainable Competitive
logistics marketing advertisement innovation performance development advantage
Adams (2006) e e e e e e e ✓ e
Hervani et al. (2005) e ✓ e e e e ✓ ✓ ✓
Albino et al. (2012) e e e e ✓ ✓ ✓ e
Ar Ilker (2012) e ✓ e e e ✓ ✓ ✓ e
Azevedo et al. (2011) ✓ ✓ e e e e ✓ ✓ e
Brecard (2011) ✓ ✓ ✓ e e ✓ ✓ ✓ ✓
Borin and Cerf (2011) e e ✓ ✓ ✓ ✓ ✓ ✓ e
Borin et al. (2013) e e e e e ✓ ✓ ✓ ✓
Bose and Pal (2012) e ✓ e e e ✓ ✓ ✓ ✓
Van den Broek and e ✓ e e e e ✓ ✓ ✓
Van den Broek-Serle (2010)
Camison and Lopez (2012) ✓ ✓ ✓ e ✓
Camino (2007) e e ✓ ✓ e e ✓ ✓ ✓
Caniels (2013) ✓ ✓ e e e e ✓ e ✓
Chan et al. (2012a) e ✓ e e e e ✓ ✓ ✓
Chen et al. (2013) e e ✓ e e e ✓ ✓ ✓
Chan et al. (2012a) e ✓ ✓ e e e ✓ ✓ e
Chan (2013) e e ✓ ✓ e e e ✓ e
Chang and Chen (2013) e e ✓ e e e ✓ e e
Cronin et al. (2011) e e ✓ e e ✓ ✓ e e
Dheeraj and Vishal (2012) e e ✓ e e e e ✓ e
Diabat and Govindan (2011) e ✓ ✓ e e ✓ ✓ ✓ e
Dijk and Yarime (2010) ✓ e e e e ✓ ✓ ✓ e
Eggers and Eggers (2011) ✓ e e e e ✓ ✓ ✓ ✓
Fisk (2010) e e ✓ e e ✓ e ✓ e
Fraj et al. (2011) e e ✓ ✓ e ✓ ✓ e e
Fraj et al. (2013) e e ✓ e e ✓ ✓ e e
Ferraro et al. (2005) e e e e e e ✓ ✓ e
Gan (2003) ✓ e e e e e e ✓ e
Getzner (2004) e e ✓ e e e e e e
Gleim (2013) ✓ e e e e e e ✓ e
Grimmer and Wooley (2012) e e e ✓ e e ✓ ✓ e
Hazen et al. (2012) e ✓ e e e e ✓ ✓ ✓
Essoussi and Linton (2010) e e ✓ e e e ✓ ✓ e
IBEF (2013) ✓ e e e e e e ✓ e
Jabbour et al. (2013) ✓ e e e e e ✓ e e
Green et al. (2012) e e ✓ e e e ✓ e e
Junquera et al. (2012) e e e e e e ✓ e e
Juwaheer et al. (2012) e e ✓ e ✓ e ✓ ✓ e
Jones et al. (2008) e ✓ e e e e e ✓ e
Kirchoff et al. (2011) e e ✓ e e e ✓ e e
Kuo (2012) ✓ ✓ e e e e ✓ ✓ e
Koo et al. (2013) e e e e e e ✓ ✓ e
Ko et al. (2013) e e ✓ e e e ✓ e ✓
Koplin (2007) ✓ ✓ e e e e e ✓ ✓
Kristrom and Lundgreen (2003) e e ✓ e e e e ✓ ✓
KPMG (2010) ✓ e e e e e ✓ ✓ ✓
KPMG (2008) ✓ ✓ e e e ✓ ✓ ✓ e
KPMG (2014) ✓ e e e e ✓ ✓ ✓ ✓
Lampe and Gazda (1995) ✓ e ✓ e ✓ ✓ ✓ ✓ ✓
Luthra et al. (2011) e ✓ e e e ✓ ✓ e e
Lin et al. (2013) e e e e e ✓ ✓ ✓ e
Lin and Sheu (2012). e ✓ e e e e ✓ ✓ e
Lin et al. (2013) ✓ ✓ e e e ✓ ✓ ✓ e
Lin et al. (2011) ✓ ✓ ✓ e e e ✓ ✓ ✓
Leonidou et al. (2012) e e ✓ e e e ✓ ✓ e
Lee et al. (2013) e e e e e ✓ ✓ ✓ e
Lirn et al. (2014) e ✓ ✓ e e e ✓ ✓ e
Matsukawa (2012) e e e e e ✓ ✓ ✓ ✓
Mathiyazhagan et al. (2013) ✓ ✓ e e e ✓ ✓ ✓ e
Mostafa (2009) e e e e e ✓ ✓ ✓ e
Mishra and Sharma (2010) ✓ e e e e ✓ e ✓ e
Morgan (2012) e e e e e ✓ ✓ ✓ e
Mourad and Ahmed (2012) e e ✓ ✓ e e ✓ ✓ ✓
Olugu et al. (2011) ✓ ✓ e e e e ✓ ✓ e
Oliver and Lee (2010) ✓ e e e e e ✓ e e
Oxborrow and Brindley (2013) e e ✓ e e e e e ✓
Panda and Goswami (2009) e e e e ✓ e ✓ ✓ ✓
Penna and Geels (2012) ✓ ✓ e e e e ✓ ✓ e
Peattie and Crane (2005) e ✓ ✓ e ✓ ✓ ✓ ✓ e
Polonsky et al. (1998) e e ✓ ✓ ✓ e ✓ ✓ ✓
Polonsky and Rosenberger (2001) e e ✓ ✓ e e ✓ ✓ ✓
(continued on next page)
Table 3 (continued )
Authors Automobile Variables

sector
GSCM & reverse Green Green Eco-labels Green product Firm Sustainable Competitive
logistics marketing advertisement innovation performance development advantage
Bolívar-Ramos et al. (2012) e e e e e ✓ ✓ ✓ ✓

Inter-brand (2013) e e e e e ✓ ✓ ✓ e
Walker and Hanson (1998) e e ✓ e e ✓ ✓ e e
Rex and Baumann. (2007) e e ✓ e ✓ e ✓ ✓ e
Rettie et al. (2012) e e ✓ e e e e ✓ e
Samad (2012) e e e e e ✓ ✓ ✓ e
Saxena and Khandelwal (2012) e e ✓ e e e e ✓ e
Saxena and Khandelwal (2008) e e ✓ e e ✓ ✓ ✓ ✓
Sharma and Iyer (2012) e ✓ ✓ e e ✓ ✓ ✓ e
Sharma et al. (2010) e ✓ e e e ✓ ✓ ✓ e
Shrikanth and Raju (2012) ✓ e ✓ e e e e ✓ e
Singh et al. (2011) e e ✓ ✓ e ✓ ✓ ✓ ✓
Singh (2013) e e ✓ e e e e ✓ e
Singh et al. (2011) ✓ e ✓ e e e e ✓ e
Simpson et al. (2007) ✓ e ✓ e e e ✓ ✓ e
Sierzchula et al. (2012) ✓ e e e e ✓ e ✓ e
Smith (2010) e e ✓ ✓ ✓ e e ✓ e
Smith (2012) e e ✓ ✓ ✓ e ✓ e e
Siriwardena et al. (2012) ✓ e ✓ e e e ✓ e e
Tang et al. (2004) e e e e ✓ e ✓ e e
Thogersen et al. (2010) e e ✓ e ✓ e e ✓ e
Tranfield et al. (2003) e e e e e e e e e
Vaughan (2008) e e e e e e e e e
Wolf (2011) e ✓ e e e ✓ e ✓ e
Xia and Tang (2011) ✓ ✓ e e e e ✓ ✓ ✓
Xu et al. (2013a) e e e e e ✓ ✓ ✓ e
Yamin et al. (1997) e e e e e ✓ ✓ ✓ ✓
Zhu and Sarkis (2004) e ✓ e e e ✓ ✓ ✓ ✓
Zhu et al. (2007) ✓ ✓ e e e e ✓ ✓ e
that green oriented firm performance have the direct relationship that are assertive approach and defensive approach. The firm can
to the sustainable development. Research articles that are in to- take the assertive approach by their will or on the basis of the
tality and exclusively in automobile industries can be seen in Figs. 3 demand of the consumer whereas in defensive approach industries
and 4 respectively. Hence from the discussion, it can be said that yes use to choose it due to legal and political pressures (Chan, 2013). So
there is a direct relationship between firm performance, which is we can see from the Tables 2 and 3 that none of the authors have
the outcome of green initiatives with the sustainable development. showed that there is a positive relationship between firm perfor-
In this way hypothesis 3.1 that is firm performance, which is the mance, which is not the result of green initiatives and the sus-
result of green initiatives have the direct relationship with the tainable development. In this way, it can be found that merely
sustainable development is accepted. Although this discussion talking and working just to make the performance of the firm
leads to another sub-hypothesis (H3.2) on the basis of same. better cannot assure the sustainable development. Hence, it cannot
H3.2: Firm performance, which is not the outcome of green be concluded that the firm performance, which is not the outcome
initiatives have the positive relationship with the sustainable of green initiatives have the positive relationship with the sus-
development. tainable development. In this way, hypotheses H3.2 that is, firm
Firm performance is not only based on the green initiatives, still performance, which is not the result of green initiatives have the
in many industries management is the least concern for the envi- positive relationship with the sustainable development is rejected.
ronment, but they also implement the green policies only to
comply the environmental norms of the country. There are two
approaches towards adopting the green initiatives by industries
90
120 80
70
60
100 50
40
80 30
20
60 10
0
40
20
0
TOTAL NO.OF PAPERS REVIEWED NO. OF PAPERS IN AUTOMOBILE
SECTOR
Fig. 2. Showing partitions of research papers in two parts which has been reviewed. Fig. 3. Distribution of variables used in all the reviewed research papers.
35 labels and green product innovation), and SD stands for sustain-

30
25 able development.
20 This equation is proven from this research paper, based on the
15
10 certain facts and findings.
5
0
6.1. Conclusion & recommendations
The study is based on the various facts and findings that are
analyzed by different reputed researchers and shows a significant
result towards the automobile industry as this industry has the
Fig. 4. Distribution of the variables used in various papers based on automobiles. highest blames for ruining the environment. The control of emis-
sion of carbon is the major challenge in front of these automakers.
That is why they face dual pressure one from the government to-
6. Findings and discussion
wards carbon emission and other from the cost controlling and firm
performance. Goodwill and company image are also one of the
After testing the hypotheses we find that green initiatives have
important concern for these auto manufacturers; green initiatives
the direct relationship with the firm performance and green ini-
help in making goodwill as well as the creation of competitive
tiatives have the positive relationship with the sustainable devel-
advantage. It has been observed that greening the supply chain and
opment, whereas firm performance, which is the outcome of green
adapting other green or ecological way of performing the business
initiatives have the direct relationship with sustainable develop-
has a positive relationship with the firm performance (Chan et al.,
ment, but the performance of the firm that is not the result of green
2012a). It is also found that GSCM and firm performance has a
initiatives have not a positive relationship hence we can say there is
significant association (Hervani et al., 2005). The performance of
a negative relationship. The firm that does not focus or less
the firm is many times based on innovations and transformational
concentrate on green initiatives have no contribution or very less
leadership (Samad, 2012). If there would be much more focus on
contribution to the sustainable development.
the creation of green product demand which should be sustainable
On the basis of various research papers and its analysis, there are
in nature and green product innovation, this will lead to the firm
various other relevant findings, which are imperative. Here in this
performance (Lin et al., 2013). Comparing those firms who are not
papers we have taken approx 100 research papers/articles in order
involved in green initiatives such as innovation and green design of
to bring the result, and these papers are very significant from the
the products are poor in their firms those who are involved in
study point of view, and all the papers are selected from the
innovation and green design of the product are better in their firm
reputed journals or source. Approx 29 journals were found which
performance as compared to those who are involved in it (Camison
were much more focused towards the automobile industry. After
and Lopez, 2012). Controlling the carbon emission can be fruitful in
the analyses of the papers, it is concluded that there are about 31%
protecting the environment. There are some more ways in con-
researchers who have done their research work on GSCM and
trolling carbon emission such as emission tax, it leads to a decrease
reverse logistics and found positive results towards the green ini-
in pollution, through an improvement in green initiatives (Brecard,
tiatives. 44% authors focused on green marketing, 10% authors
2011). Emission tax is always welfare dominant over a subsidy on
worked on green advertisement, 11% authors on ecolabels,40%
consumer purchases of the clean product because of its contribu-
authors on green product innovation, and the crucial point to notice
tion to a reduction in environmental damage (Matsukawa, 2012). If
76% authors found all these green initiatives are positive towards
we look into the countries like India, generally people do not aware
performance of the firm. On the other hand if we see the authors
about the green marketing concept (Singh, 2013). But consumers
who have worked in the automobile sector that is about 29 papers,
are somewhat aware of what is green and what is not (Rettie et al.,
it is found that GSCM and reverse logistics which has been
2012), and choosing green brand preferences often influenced by
researched by 44% authors. 24% researchers, in green marketing
age, income level, gender and education (Mourad and Ahmed,
and 34% in green product innovation. Here 75% & 86% authors who
2012). Socially responsible investment (SRI) has gained impor-
are satisfied and commented on the firm performance and sus-
tance in The US. Investment in green shares is also increasing
tainable development respectively. There is one more remarkable
among US investors (Getzner, 2004).
thing in the study is that none of the authors who worked on
automobile and green initiatives found any concrete work on green
advertisement and eco-labels. But if we see in totality of the
research papers we can found that 10% of the authors found a 45
40
positive relationship with Green advertisement and 11% authors
35
towards eco-labels. All these facts and figures can be seen in Figs. 3 30
and 4. It can be also seen that to maintain the authenticity of this 25
research paper, the research papers which has been chosen are 20
15
from various reputed journals and articles. The research papers
10
properly distributed in Fig. 5. 5
These findings show that the green initiatives are one of the 0
important factors not for the sustainable development but also for
the firm's performance. Here an equation can be drawn to make the
study clearer, that is:
FP ¼ GI SD
Where, FP is for firm performance, GI is for green initiatives (GSCM Fig. 5. Distribution of the research papers on the basis of name of journals which has
& reverse logistics, green marketing, green advertisement, eco- been reviewed.
The research has constructively ascertained the manner in and controlling is very necessary for the green production as it leads to
the extent to which consumer's environmental attitudes affect the better performance. The manager must be assertive while
their purchasing behavior (Singh et al., 2011). The data suggests adopting green initiatives.
that firms believe in a positive impact but have difficulties in its
quantification and firms also felt that the engagement in sustain- 6.4. Limitations and scope of the study
ability is cost intensive and requires a large sum of investment in
human resources, time, and technology (Wolf, 2011). There is an It is very difficult to say that, a study can be completed without
imperative role of stakeholders to protect and conserve the natural any limitations, in the same way, various limitations faced by the
resource through the implementation of green technologies and authors in bringing this study. The research is based on the sec-
thinking (Walker and Hanson, 1998). Many firms improved their ondary data and there is lack of empirical data due to time
performance by adopting an environmental strategy in their busi- constraint and another issue is that there was a lack of research
ness process such as supply chain etc. and there is a positive role of papers that are based on the automobile firm, although the en-
stakeholders (Kirchoff et al., 2011). In recent studies, it has been deavors have been done to review papers based on the topic.
also observed that green shipping have the positive impact on the This research paper can be helpful for various communities such
financial performance. Therefore, the adoption of green strategies is as academicians, research scholars, and industries. The findings of
highly recommended (Lirn et al., 2014). Not only corporations but the study can also help in further research on this issue and can also
also individual consumers are willing to take part in the global add more elements like sustainable index can be constructed by
movement toward ecological sustainability (Lee et al., 2013). using multi-dimensional scaling technique which consider eco-
Despite some the controversial findings of the literature survey, nomic, environmental and social aspect and making useful green
recent research supports the existence of a positive link between marketing strategies, which would undoubtedly beneficial to the
proactive environmental strategies and organizational perfor- industry as well as for our planet.
mance (Fraj et al., 2011). In this way, automobile firm's can adopt
green initiatives and enjoy the better firm performance and
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Journal of Cleaner Production xxx (2015) 1e14

Contents lists available at ScienceDirect

Journal of Cleaner Production

Green initiatives: a step towards sustainable development and ﬁrm's

Author Parameter Description

OperaƟonal performance ConservaƟon of

Fig. 1. Sustainable development and ﬁrm performance through green initiatives.

5. Hypotheses development providing valuable information, also gives appropriate evidence to

Authors Variables Major ﬁndings

Authors Automobile Variables

Authors Automobile Variables

Bolívar-Ramos et al. (2012) e e e e e ✓ ✓ ✓ ✓

35 labels and green product innovation), and SD stands for sustain-

6.1. Conclusion & recommendations

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