J Bus Ethics (2012) 105:519–533
DOI 10.1007/s10551-011-0983-x
Corporate Sustainable Development: Testing a New Scale Based
on the Mainland Chinese Context
Wing S. Chow • Yang Chen
Received: 26 August 2010 / Accepted: 14 July 2011 / Published online: 30 July 2011
Ó Springer Science+Business Media B.V. 2011
Abstract According to the predominant corporate sus-
tainable development (CSD) framework, this exploratory
paper verifies that CSD construct can be modeled by inte-
grating the dimensions of social, economic, and environ-
mental development. We first developed and validated
measurement scales for these three dimensions based on a
survey of 314 managers in mainland China. Then, using
structural equation modelling, we confirmed that the proposed
model is valid. Therefore, our findings may allow researchers
to explore CSD further, and practitioners to develop their
understanding of CSD initiatives in organizations.
Keywords Corporate sustainable development
Scale
development
Instrument refinement
Second-order
analysis
Theory development
Introduction
The World Commission on Environment and Development
(WCED) defines sustainable development as ‘‘development
that meets present needs without compromising the ability
of future generations to meet their own needs’’ (World
Commission on Environment and Development 1987). The
growing trend toward adopting this principle in industry
has altered the macro level of organizations in marketing
their products and services, and subsequently the micro
W. S. Chow (&)
Y. Chen
Department of Finance and Decision Sciences,
School of Business, Hong Kong Baptist University,
Waterloo Road, Kowloon Tong, Hong Kong
e-mail: vwschow@hkbu.edu.hk
Y. Chen
e-mail: francisnju@gmail.com
level of their operations (Banerjee 2002). The corporation,
as the most important constituent of business and society,
faces the challenge of moving from conventional to sus-
tainable development (Hart 1997). The effectiveness of
integrating sustainable development into business strategy
is now being actively debated (e.g., Hart 1995; Shrivastava
1995; Starik and Rands 1995).
Corporate sustainable development (CSD) is a business
strategy that attempts to meet the needs of organizational
stakeholders without compromising the resources and
interests of the local community (Dyllick and Hockerts
2002). The concept of CSD has been the study object of
much research in recent decades, and researchers have
adopted varying perspectives. Initially, the concept was
exclusively associated with its economic aspects, under-
stood as the firm’s obligation to maximize shareholder
value. For example, Porter (1985) claimed that CSD con-
sists simply of carrying out actions that improve the
economic growth and long-term profitability of an organi-
zation. This doctrine, however, has been challenged as the
natural environment becomes more and more important.
Hart (1995) stated that firms should have responsibilities
toward the environment that go beyond their economic
obligations. Other researchers have related the CSD concept
to organizational actions with more ethical and social
dimensions (Brown and Dacin 1997; Chan 2005; Christ-
mann 2000; Molnar and Mulvihill 2003). So far, these
studies have considered CSD only as a discreet element, and
none has taken its multi-dimensional nature into account
(Baumgartner and Ebner 2010; López et al. 2007).
Corporate sustainable development should be understood
as a broad concept because it takes in the whole set of
normative issues related to both the role of business in
society and the natural environment (Hart 1995; Sharma
and Ruud 2003). The objective of CSD should be to achieve
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a firm’s financial performance effectively while considering
human welfare and ecological constraints (Sharma 2002;
Shrivastava 1995). One of the most widely accepted CSD
frameworks explains the CSD construct as represented by
three correlated dimensions, namely social, economic, and
environmental development; such examples are Chang and
Kuo (2008), Erol et al. (2009), and Ness et al. (2007). These
three dimensions of CSD are known, respectively, as social
development through corporate social responsibility (such
as enhancing social welfare and promoting healthier soci-
eties), economic development through corporate value
creation (such as improving the effectiveness and efficiency
of services and products), and environmental development
through cooperate environmental management (such as
improving ecology) (Bansal 2005; Sharma 2002). From this
perspective, we follow the works of Baumgartner and Ebner
(2010) and Russo (2003) and define CSD as the degree to
which firms adopt social, economic, and environmental
development in their operations.
Although there is no shortage of empirical researches on
CSD (such as Chan 2005; Chang and Kuo 2008; Erol et al.
2009), most of these recent works have still measured the
CSD dimensions based on qualitative analysis using com-
pany declarations (Steurer et al. 2005), on empirical anal-
ysis using annual reports (Chang and Kuo 2008), or on
approximations using a single indicator of companies
(Chan 2005; Lindgreen et al. 2009). But one weakness of
this approach to study CSD applications is that these
studies have failed to address adequately the needs of
industry decision makers because their findings have not
described clearly a set of successful CSD practices within
an organization (Ding 2008; Labuschagne et al. 2005).
Corporations need to obtain a set of indicators that will
help them determine their level of achievement in CSD
practices (Bansal 2005). Thus, the main aims of this study
are (1) to identify the multi-dimensional nature of CSD
based on its social, economic, and environmental dimen-
sions; (2) to identify a measurement scale for CSD; and (3)
to validate the scale empirically.
In the following sections, we first present a conceptual
review of CSD and identify its structural dimensions. The
design of the study and the validation of measures are then
reported separately, followed by a discussion of the find-
ings and a review of their implications and extensions.
Finally, we present our conclusions.
Theoretical Background
Corporate Sustainable Development (CSD)
Although the concept of CSD is understood intuitively, it
remains difficult to express in concrete operational terms
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W. S. Chow, Y. Chen
(Labuschagne et al. 2005). Realizing the goal of CSD
implies that companies need to be able to measure the
sustainability of their current practices as well as the
direction in which they are moving, and to say what size of
changes is necessary to meet their goals (Erol et al. 2009).
Studies of CSD have adopted various perspectives of
analysis. Many authors have proposed to measure CSD in
the form of discreet elements of the CSD dimensions,
rather than considering them integrated in terms of CSD’s
multi-dimensional nature (Baumgartner and Ebner 2010).
For instance, Porter (1985) analyzed the importance of
financial results in terms of profitability and economic
growth with respect to CSD. Peteraf (1993) related CSD to
the economic performance, growth, and long-term profit-
ability of organizations. Other works have focused more on
ethical aspects. For example, Chan (2005) and Christmann
(2000) analyzed CSD through the impact of environmental
management on corporate everyday operations. Molnar and
Mulvihill (2003) reviewed the experiences and challenges
firms encounter in CSD from the viewpoint of organiza-
tional learning. Brown and Dacin (1997) studied in greater
depth the effect of social responsibility on the overall
valuation of a firm and its products.
Corporate sustainable development, however, should be
treated as a multi-dimensional construct (Baumgartner and
Ebner 2010). Studies that consider its multi-dimensional
nature take into account its diverse related dimensions. For
example, some have held that organizations should con-
sider CSD in terms of the interrelations between various
components, such as the individual, organizational, social,
and political (e.g., Baumgartner 2009; Linnenluecke et al.
2007); some have concentrated on eco-equity, eco-
efficiency, and eco-effectiveness, holding that organiza-
tions should be working toward efficiency and equity for
the natural environment (e.g., Bansal and Roth 2000; Chen
et al. 2008); while others have considered CSD strategy as
the integration of pollution control, eco-efficiency, recir-
culation, eco-design, ecosystem stewardship, and business
redefinition (e.g., Sharma and Henriques 2005).
Despite the diversity of the views above, recent
researchers have concurred that CSD can be explained in a
framework represented by three dimensions, namely social,
economic, and environmental development (Baumgartner
and Ebner 2010; Erol et al. 2009; Ness et al. 2007). The
CSD literature considers this framework to be widely
accepted as well as being the most important one. For
example, López et al. (2007) and Marrewijk (2003) pointed
out that CSD is achieved through social, economic, and
environmental development, and that these three dimen-
sions are all interrelated. Melville (2010) argued that CSD
is geared toward the triple bottom line—people, planet, and
profit, which refers to companies harmonizing the green
environment by addressing their efforts to implementing
Corporate Sustainable Development
social, economic, and environmental development simul-
taneously (Elkington 1997). In this study, we adopted this
framework as the representation of a construct of CSD. We
defined the concept of CSD as the degree to which firms
adopt social, economic, and environmental development in
their operations (Baumgartner and Ebner 2010; Hillman
and Keim 2001; Russo 2003).
In the following, we review the existing literature based
on these three dimensions: social development, economic
development, and environmental development. Although,
we have analytically separated the CSD concept into these
three dimensions, we recognize that many of the features of
other dimensions (e.g., eco-efficiency, eco-effectiveness) in
fact are highly interrelated or overlap. Moreover, in our
analysis, we follow the research pattern of Nahapiet and
Ghoshal (1998) in that we set out to indicate these three
important dimensions rather than review them exhaustively.
Social Development (SOC)
Social development refers to managing a company in such
a way as to reduce social inequality and divisions, improve
quality of life, and strengthen relationships with its various
stakeholders. On the path to sustainability, SOC should be
an important dimension for research and practice (Sharma
and Ruud 2003). SOC aims to influence positively all
present and future relationships with stakeholders so as to
ensure stakeholder loyalty to the company (Ebner 2008).
Cuthill (2009) argued that SOC should include social
capital, social infrastructure, social justice and equity, and
engaged governance. In this study, SOC is focused more on
moral and ethical imperatives—that is, social justice and
equity—and a concern for the social good (Bansal 2005;
Donaldson and Preston 1995).
Social justice and equity is embodied in an ethical code
for human survival and progress on a par with other high-
minded ideas such as democracy, freedom, and human
rights (Lafferty and Langhelle 1999). It requires organi-
zations to practice SOC by assuming wider responsibilities
toward various stakeholder groups and their social envi-
ronment to better fulfill stakeholders’ needs and ensure
their loyalty to the company (Baumgartner and Ebner
2010). Salmones et al. (2005) further claimed that to
implement SOC, a corporation should behave beyond mere
legal frameworks and be honest in its relationships between
its customers and employees.
Geibler et al. (2006) claimed that it is difficult to mea-
sure SOC because consensus on relevant criteria is lacking.
In this study, we followed Bansal (2005) by focusing on
corporate social responsibility (CSR) when measuring SOC
on social justice and equity. CSR refers to a company’s
activities and status as related to its perceived societal or
521
stakeholder obligations (Luo and Bhattacharya 2006).
Wood’s (1991) framework for CSR, which is modeled and
based on socially responsible processes, has been widely
accepted in the business community (Hillman and Keim
2001). In this framework, CSR involves three processes:
environmental assessment, stakeholder management, and
social issues management. Here, we first discuss the latter
two processes and then the environmental assessment in a
later section. In CSR, stakeholders include, but are not
limited to, suppliers, customers, employees, local com-
munities, and governments (Berman et al. 1999). Stake-
holder management involves actions to build a strong
stakeholder relationship (Garriga and Melé 2004; Lin-
nenluecke et al. 2007); such actions by firms include
paying attention to the health and safety of the community
and employees (Baumgartner and Ebner 2010), considering
stakeholder interests by stakeholder involvement (Geibler
et al. 2006), improving public disclosure by making oper-
ational processes transparent (Erol et al. 2009), and creat-
ing and distributing value for the equal treatment (Halme
et al. 2006). Social issues management is ‘‘the process of
addressing social issues’’ (Bansal 2005). This involves a
firm’s practicing ethical behavior with respect to human
rights (Baumgartner and Ebner 2010), social impact
(Tanzil and Beloff 2006), social projects (Lindgreen et al.
2009), and so on.
Economic Development (ECO)
Economic development means managing a company as a
durable participant in the market, with a positive impact on
the economic circumstances of its stakeholders and on
systems at the local, national, and global levels. ECO is
important for a corporation because it is a prerequisite for
the corporation’s survival (Steurer et al. 2005). Baum-
gartner and Ebner (2010) claimed that ECO ‘‘embraces
general aspects of an organization that have to be respec-
ted—next to environmental and social aspects—in order to
remain in the market for long time.’’
In the past, researchers considered the measure of ECO
to be based mainly on a firm’s financial performance. For
example, Porter (1985) claimed that ECO refers to the
economic growth and long-term profitability of an orga-
nization. Steurer et al. (2005) suggested that the objectives
of ECO be based on improvements in share earnings.
Recent studies have claimed that ECO in a corporation
should consider actions that lead to economic success
rather than only financial results (Baumgartner and Ebner
2010). One way to achieve economic success or long-term
competitiveness is value creation (Bansal 2005), which is
calculated by subtracting capital investment from market
value (Hillman and Keim 2001).
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Firms can create value through the goods and services
they produce (Bowman and Ambrosini 2000). Bansal
(2005) claimed that firms can increase their value by
improving the effectiveness and efficiency of their goods or
services. Value can be created directly based on Hillman
and Keim’s (2001) equation above. First, ECO could
involve methods to maximize the value created and raise
standards of living around the world by reducing opera-
tional costs (Farrell 2005; Fowler and Hope 2006). Value
creation could involve activities such as reducing employee
payments (Erol et al. 2009), reducing the tax paid for
employees (Veleva and Ellenbecker 2001), lowering the
environmental cost burden (Tanzil and Beloff 2006), and
so on. Value can also be created by generating revenue
(Seth 1990), such as stimulating sales growth (Chirstmann
2000), improving the production process (Porter and van
der Linde 1995), and enhancing government regulations
(Makadok 2001). Active collaboration with stakeholders
can also increase value (Ulaga 2003). Although this prac-
tice may not lead to a positive financial performance
directly linked to revenues, it could create value for
stakeholders that would achieve long-term economic suc-
cess (Bansal 2005).
Value creation may intend to ‘‘reform or revolutionize
the pattern of production by exploiting an invention’’
(Schumpeter 1942); researchers have found that innovative
goods and services also play an important role and are
considered an effective tool for ECO (Mansfield et al.
1977). It has also been suggested that value could be created
by producing new and different goods or services that
would satisfy customers (Porter 1985). López-Gamero et al.
(2009) claimed that ECO could be promoted by engaging in
operations such as goods or services innovation and dif-
ferentiation. Sharma (2002) maintained that as the natural
environment becomes more important, green technology
could be an important tool for corporations in achieving
financial success and competitive advantage. Firms should
continuously improve their operational processes to dif-
ferentiate their goods or services and achieve sustained
competitiveness in the long run (Konrad et al. 2006).
Environmental Development (ENV)
Environmental development refers to a company’s efforts to
manage its operations in such a way that its final products do
little harm to the environment, including land, air, and water.
The core of ENV for an organization is to operate within the
carrying capacity of the ecosystem by reducing environ-
mental pollution and minimizing resource consumption and
the corporation’s ecological footprint (Lindgreen et al. 2009;
Hart 1995), which can be practiced through corporate envi-
ronmental management (Linnenluecke et al. 2007; Bansal
2005; Sharma 2002).
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W. S. Chow, Y. Chen
In general, the difficulty in measuring ENV is evidenced
by the diversity of data used, from anecdotal evidence, case
studies, and surveys to proprietary data sources (Montabon
et al. 2007). Most research has focused on ENV through
the survey method (Sharma et al. 2007) because of its
broad and purely perceptual view (Montabon et al. 2007).
But using this method to assess ENV in a way that satisfies
all user needs is no easy task (Ding 2008). Different studies
have provided countless items for measuring ENV, such as
reducing water consumption (Erol et al. 2009), reversing
logistics (Prahinski and Kocabasoglu 2006), recycling
waste and redesigning products (Jones and Comfort 2005),
making green purchases (Zsidisin and Siferd 2001), and so
on. Most of these items, however, are more operational in
nature and are constrained by specific types of industry
(López-Gamero et al. 2008). Companies in different
industries may share common purposes while practicing
different processes (Chan 2005; Sharma and Vredenburg
1998). For example, companies may aim at reducing the
risk of environmental accidents, spills, and releases by
training employees on processes, monitoring environmen-
tal impacts, or even promoting environmental legislation.
In this study, we collected the characteristics of existing
measurements and analyzed ENV from a more generic and
integral view. A number of taxonomies describe ENV,
ranging from reactive to proactive approaches (Sharma and
Ruud 2003). In most cases, the reactive approach involves
actions that could reduce the environmental impact of
products and services or dispose of waste responsibly (Hart
1995; Schianetz and Kavanagh 2008), whereas the proac-
tive approach requires alternative production processes that
could reduce waste and emissions (Bansal 2005). Such
alternative processes include using less traditional fuels
(Lindgreen et al. 2009), reducing the impact on animal
species and natural habitats (Rueda-Manzanares et al.
2008), and the like.
Hart (1995) claimed that ENV can be based on pollution
control, pollution prevention, and product stewardship.
Pollution control is considered a reactive approach, also
known as an end-of-pipe solution (Hart 1995). Pollution
prevention is an example of the proactive approach.
Product stewardship focuses on a firm’s product in an effort
to reduce its cradle-to-grave impact (Gilley et al. 2000;
Hart 1995). This involves practices such as reducing pur-
chases of non-renewable materials, chemicals, and com-
ponents (Sharma 2000), decreasing energy consumption
(Baumgartner and Ebner 2010), and so on.
To conclude, firms need to identify a right way to
achieve their ENV. A sound ENV practice would include
reducing pollution (Sharma 2002), cutting down produc-
tion costs (Aragón-Correa 1998), complying with regula-
tions (Berry and Rondinelli 1998), ensuring both capital
and insurance (Anderson 1999), and so forth.
Corporate Sustainable Development
Measures and Data Collection
To test our research objectives, we adopted a survey
approach to collect data. In this section, we discuss the
measures and data collection methods.
Measures
We first conducted a literature review on CSD and col-
lected relevant issues, indicators, or measures as necessary.
We applied Richards and Gladwin’s (1999) three criteria of
the analytical process to identify relevant CSD literature as
follows. The first criterion was relevance, which ensured
that entrepreneurs would deem the items we selected as
important to their future and would consider the indicators
in making decisions. The second was practicability, which
ensured that the measurements would be practical, reliable,
and within the resources available to the business. Finally,
the third criterion was appropriateness, which ensured that
the items reflected actual environmental impacts and
coincided with a company’s long-term aims. Table 6 in
Appendix reviews a list of 25 CSD papers representing the
applications of CSD in different industries. We first iden-
tified all their relevant CSD practices, and then further
refined them by associating their similar features into a
generic measure. In the end, all the CSD practics were
grouped into 22 measures, which in turn were grouped and
matched with the three dimensions of CSD. The respective
measures and CSD dimensions are shown in columns 1 and
3 in the same appendix. Coincidentally, our CSD measures
for SOC, ECO, and ENV matched perfectly with the CSD
measures proposed by Bansal (2005), Chan (2005), and
Sharma and Vredenburg (1998). We therefore concluded
that it was reasonable to assume that our CSD measures for
SOC, ECO, and ENV were generic.
To validate the accuracy of our CSD construct, we
follow the literature (e.g., Chang and Kuo 2008; Enticott
and Walker 2008; Porter 1985) and test its correlation with
financial performance (FINP). We adopted four items from
Chan (2005) to measure FINP: (1) comparing sales growth
with other firms in their industry, (2) comparing earnings
growth with other firms in their industry, (3) comparing
market share change with other firms in their industry, and
(4) comparing returns on investment with other firms in
their industry.
We developed our questionnaire based on these CSD
measures and financial performance measures. We mea-
sured CSD by using a 7-point Likert scale ranging from 1
(a small extent) to 7 (a larger extent). We measured FINP
by using a 7-point Likert scale ranging from 1 (much worse)
to 7 (much better). Although the questionnaire was origi-
nally developed in English, it was subsequently translated
into Chinese to facilitate respondents’ understanding. We
523
followed the approach of Bhalla and Lin (1987) and
adopted the linguistic equivalence of the two versions—
Chinese and English—by using the back-translation tech-
nique: All measures were professionally translated and
back-translated to ensure conceptual equivalence. A pretest
was carried out to refine the measurement items by local
professors. We then implemented their feedback to improve
the final version of the questionnaire. Table 7 in Appendix
presents our questionnaire on the CSD dimensions and their
measures.
Data Collection
We adopted subjective measures for the three dimensions
of CSD in this study, which were rated by the self-report of
CSD practitioners. The reason for using measures based on
self-report rather than objective measures from annual
reports is that the three CSD dimensions were more easily
expressed in subjective measures, the measures were easier
to assess and evaluate by CSD practitioners, and they were
more convenient for collecting information from firms of
different sizes (Labuschagne et al. 2005). Furthermore, the
reliability of a company’s annual report may represent a
significant limitation for the study and the report may differ
from actual corporate actions (Turker 2009).
We collected data in mainland China to develop and
validate the CSD scale. As the world’s largest emerging
country, China represents an area that organizational
researchers should not ignore (Peng 2004). In addition, CSD
can also be understood differently across different cultures
(Carroll 1993). As a result, companies in different countries
and under different cultures should have different content
regarding CSD (Gao 2009). As a transactional market,
China is a superb context for studying CSD (Birkin et al.
2009; Zhang and Wen 2008).
The participants were mainly Chinese managers enrol-
led in a part-time evening MBA program in a university in
mainland China. They were conversant with the CSD
activities in their companies because these were located in
an economically well-developed region of China, in which
these firms were the most closely monitored by Chinese
environmental agencies (Dutton 1998). For managers to
attend the MBA program in the university, they had to
meet the standards of having a bachelor’s degree with at
least 3 years of working experience. Thus, it was reason-
able to assume that the participants were conversant with
the operations of their firms and could understand the
content of our questionnaire and answer the questions
according to the extent of CSD practices in their organi-
zations. We contacted these managers in fall 2009 through
the MBA program in which they were registered. With the
permission of the course instructors, we distributed the
questionnaire to them in the evening MBA classes they
123
524 W. S. Chow, Y. Chen

attended. The MBA instructors allowed them to read and Table 1 Characteristics of study sample
complete the questionnaires in a 30-min period, and they Organizational information
were returned to us immediately. All managers completed
the questionnaire. Measure Items Freq. Percent
We collected 314 questionnaires. Table 1 shows the Type of industry Academic/Education 9 2.9
demographic data of our respondents. Manufacturing Computers/ 56 17.8
companies made up 22.9% of the survey respondents, Tele-Communications/
followed by IT (computers, telecommunications, and net- Networking
working) and the financial services sector (banking, Manufacturing 72 22.9
financial, and insurance) at 17.8 and 15%, respectively. Medicine/Health 8 2.5
Ownership types included state owned (39.8%), privately Restaurant/Hotel 0 0
owned (20.1%), and foreign owned (36.9%). Average Textile/Garment 9 2.9
annual income for 71.3% of the companies was larger than Utilities 9 2.9
RMB 100 million. Of the companies represented, 28.4% Banking/Finance/ 47 15.0
had operated for less than or equal to 10 years and 76.5% Insurance
for more than 11 years. As for firm size, 11.5% had 11–50 Electrics/Electronics 12 3.8
employees and 64.3% over 100 employees. In addition, we Engineering/ 8 2.5
Architecture
performed Podsakoff and Organ’s (1986) one-factor test,
Mass Media/Publishing 1 0.3
and our results detected no problem of common method
Real Estate 14 4.5
variance.
Retailing/Wholesaling 25 8.0
Transport/Shipping/ 14 4.5
Logistics
Data Analysis and Results
Other 29 9.2
Missing 1 0.3
We conducted the following procedural steps of explor-
Ownership structure State owned 125 39.8
atory factor analysis (EFA) and confirmatory factor anal-
Privately owned 63 20.1
ysis (CFA) to verify the psychometric validity of our
Foreign owned 116 36.9
constructs before verifying our research question by con-
Missing 10 3.2
ducting first-order and second-order analysis (Churchill
1979). The second-order analysis was a commonly used Average organizational \10 19 6.1
annual income 10–49.9 39 12.4
structural equation model to verify whether a construct of (HK$ in millions)
CSD was represented by the integrated dimensions of SOC, 50–99.9 19 6.1
ECO, and ENV. The test of the first-order analysis was a 100–499.9 45 14.3
prerequisite for the second-order analysis. 500–999.9 33 10.5
C1000 146 46.5
Exploratory Factor Analysis Missing 13 4.1
Operational period of \1 4 1.3
the organization 1–5 44 14.0
We used EFA to investigate the dimensionality of the CSD
(in years)
scale in order to ensure that all measures loaded onto their 6–10 41 13.1
respective CSD dimensions only. Principal component 11–15 68 21.7
analysis with promax rotation method was used. Promax 16–20 44 14.0
rotation, which is an oblique rotation, was employed [20 100 31.8
because it was reasonable to assume that any extracted Missing 13 4.1
factors relevant to CSD should be intercorrelated. We Size of organization B10 9 2.9
applied three commonly used decision rules to identify the (number of employees) 11–50 39 12.4
number of factors underlying the CSD construct (Hair et al. 51–100 28 8.9
2010). Items with less than a 0.35 loading and that cross- [100 202 64.3
loaded on two or more factors at 0.35 or higher were Missing 36 11.5
excluded. An eigenvalue of 1 was used as the cutoff value
for extraction. We identified a three-factor structure with
the extracted factors explaining 69.5% of total variance. factor loadings for the condensed 22-item scale. The sig-
The reliability analysis should indicate an item-to-total nificant loading of all items on the single factor indicated
correlation of more than 0.40. Table 2 summarizes the unidimensionality. The fact that no item had multiple

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Corporate Sustainable Development 525

Table 2 Exploratory factor analysis for CSD items We first used convergent validity to verify that all pro-
Model construct Measurement item Promax-rotated loadings
posed measurement items actually represented the construct
factor itself (Chau 1997; Doll et al. 1994). We adopted the fol-
lowing criteria to evaluate the goodness-of-fit of a con-
1 2 3
struct1: (1) v2/df \ 5.0 (Wheaton et al. 1977), (2)
SOC SOC1 0.89 -0.09 0.05 RMSEA \ 0.10 (MacCallum et al. 1996), (3) SRMR \ 0.08
SOC2 0.90 -0.10 0.11 (Hu and Bentler 1999), (4) GFI [ 0.80 (Marcoulides and
SOC3 0.84 -0.04 0.08 Schumacker 1996), (5) CFI [ 0.90 (Hair et al. 2010), and (6)
SOC4 0.73 0.22 -0.14 NFI [ 0.90 (Bentler and Bonnet 1980).
SOC5 0.79 0.04 0.07 We then followed Sethi and King’s (1994) method to
SOC6 0.75 0.22 -0.13 validate our measurement items, that is, we deleted the
ECO ECO 1 0.06 0.52 0.13 measurement item with the highest value of standardized
ECO 2 -0.02 0.95 -0.14 residuals and used the lower value of squared multiple
ECO 3 -0.06 0.90 0.01 correlation (SMC) as a tie breaker. In addition, we fol-
ECO 4 0.09 0.71 -0.04 lowed the procedure suggested by Shi et al. (2005) to
ECO 5 0.10 0.60 0.12 analyze substantive reasons before removing any mea-
ECO 6 0.14 0.54 0.26 surement items in the modification procedure. Table 8 in
ENV ENV 1 -0.12 0.26 0.71 Appendix details all these operations and the final results.
ENV 2 -0.03 0.15 0.79 We assessed the convergent validity of each factor by
ENV 3 0.07 -0.17 0.86 within-scale factor analysis; we then further assessed it by
ENV 4 -0.08 0.19 0.82
comparing the item loadings with the recommended min-
ENV 5 0.05 0.14 0.73
imum value of 0.60 (Chin et al. 1997). The results in
Table 3 show that the constructs demonstrated high con-
ENV 6 -0.06 0.19 0.76
vergent validity, since all t-values were significant and all
ENV 7 -0.01 -0.11 0.97
item loadings were greater than 0.60.
ENV 8 -0.08 -0.05 0.97
Second, we assessed construct reliability, which reflects
ENV 9 0.21 -0.17 0.78
the internal consistency of the indicators measuring a given
ENV 10 0.20 -0.06 0.67
construct (Fornell and Larcker 1981). We did so using
Cronbach’s alpha 0.92 0.87 0.95
Cronbach’s alpha and composite reliability (Hair et al.
Sum of squares (eigenvalue) 11.78 1.91 1.60
2010). Table 3 shows these two values for each dimension
Cumulative variance explained (%) 53.56 62.25 69.52
of CSD. All three passed the test since their composite
Bold values indicate the factor with the highest loading reliability and Cronbach’s alpha values were greater than
0.70 (Nunnally 1978).
cross-loadings supported the preliminary discriminant Finally, we assessed discriminant validity; this can be
validity of the scale. Furthermore, the reliability coeffi- inferred when the measures of each construct converge on
cients for all three factors were above 0.70, indicating their respective true scores, which are distinct from the
acceptable reliability (Nunnally 1978). scores of others (Churchill 1979). We analyzed discrimi-
nant validity by (1) examining factor correlations (Kling
Confirmatory Factor Analysis 2001), and (2) performing chi-square difference tests
(Chang and King 2005). Table 4 shows means, standard
The analytical framework of CFA provides an appropriate deviations, and correlations of all the three factors (i.e.,
means of assessing the soundness of a measurement model SOC, ECO, and ENV). Table 4 shows that the factor cor-
for the theoretical construct space of CSD (Chin and Todd relations between SOC, ECO, and ENV were less than
1995). The measurement model consists of the relation- 0.80, confirming the discriminant validity of the scale
ships between the observed items and the construct they (Bhattacherjee 2002). Table 5 shows the chi-square dif-
measure. Upon estimating a measurement model, it is ferences between different pairs of the CSD dimensions.
possible to assess directly measurement efficacy. Pro-
ceeding in the CFA technique provides the fullest evidence 1
We treat these standards as marginal acceptable limits. We admit
of measurement efficacy (Bentler 1989). In this study, we that high acceptable standards of the goodness-of-fit are suggested as
applied specific CFA techniques (i.e., convergent validity, follows: 1.0 \ v2/df \ 3.0 (Hair et al. 2010), (2) RMSEA \ 0.05 or
0.08 (Browne and Cudeck 1993; Steiger 1990), (3) SRMR \ 0.05
construct reliability, and discriminant validity) using
(Byrne 1998), (4) GFI [ 0.95 (Joreskog and Sorborn 1978), (5)
LIREL 8.80 software with the maximum likelihood esti- CFI [ 0.95 (Bentler and Bonnet 1980), and (6) NFI [ 0.95 (Bentler
mation (MLE) procedure. and Bonnet 1980).

123
526 W. S. Chow, Y. Chen

Table 3 Finalized CFA results

Model Measurement Standardized t value Composite Cronbach’s
for the constructs
construct item loading reliability alpha

SOC SOC1 0.87 –a 0.93 0.92

SOC2 0.94 25.21*
SOC3 0.87 21.48*
SOC5 0.83 19.43*
SOC6 0.75 16.39*
ECO ECO 1 0.62 –a 0.86 0.84
ECO 2 0.85 11.79*
ECO 3 0.90 12.17*
ECO 4 0.62 9.40*
ECO 5 0.67 9.98*
ENV ENV 2 0.88 –a 0.97 0.94
ENV 4 0.92 25.29*
* Estimated standardized factor ENV 5 0.86 21.78*
loading significant at P \ 0.05 ENV 6 0.91 24.15*
a
Initially fixed at 1.0 for ENV 7 0.85 21.03*
estimation purposes

Table 4 Assessment of discriminant validity using factor CSD (Kuo and Hsu 2001). Each construct had five mea-
correlations sures. Our first-order model passed the test of all criteria:
Dimensions Mean (SD) SOC ECO ENV v2/df = 4.02, RMSEA = 0.098, SRMR = 0.063, GFI =
0.87, CFI = 0.97, and NFI = 0.96. We accepted Fig. 1 as
SOC 4.40 (1.26) 1.00
an accurate representation of our first-order model for
ECO 4.47 (1.25) 0.55 1.00 CSD. The results showed that the factor loadings for the
ENV 4.68 (1.40) 0.64 0.69 1.00 first-order constructs of SOC, ECO, and ENV ranged from
0.75 to 0.94, 0.62 to 0.90, and 0.86 to 0.92, respectively.
We tested the discriminant validity between any two of the ECO and ENV had the highest correlation value (0.69),
three dimensions by comparing the v2 values of the original followed by SOC and ENV (0.64), and finally SOC and
(i.e., the model with the correlation between the two factors ECO (0.55).
free of control) with the constrained model, where the two
factors were united as one construct (i.e., the correlation Second-Order Analysis
between the two factors was set as (1). All v2 values of the
constrained model were significantly much larger than that We tested our second-order model of CSD also using the
of the original, so we concluded that the two dimensions LISREL 8.80 software, as shown in Fig. 2. The second-
differed from each other and could not be united. Our three order model posited a latent factor governing the correla-
dimensions therefore passed the discriminant test. tions among SOC, ECO, and ENV (Kuo and Hsu 2001).
The paths from the second-order construct (CSD) to
First-Order Analysis the three dimensions were significant and greater than the
suggested cutoff of 0.7 (Chin 1998). The model passed
Figure 1 sets out the correlated first-order model of CSD all goodness-of-fit criteria: v2/df = 4.02, RMSEA =
based on the LISREL 8.80 software. The first-order model 0.098, SRMR = 0.063, GFI = 0.87, CFI = 0.97 and
suggests that the three constructs, or dimensions (i.e., SOC, NFI = 0.96. Additional tests were required to justify the
ECO, and ENV), were independent in their prediction of existence of CSD as a second-order construct (Bollen

Table 5 Assessment of
Factors ML estimate T value Unconstrained Constrained v2 difference
discriminant validity: v2
model model
difference test
v2 (df) v2 (df)

SOC with ECO 0.55 6.75 134.11 (34) 544.08 (35) 409.97
SOC with ENV 0.64 8.61 124.32 (34) 869.62 (35) 745.30
ECO with ENV 0.69 7.59 137.19 (34) 443.92 (35) 306.73

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Corporate Sustainable Development 527

SOC1 .87 (----@)1 SOC1 .87 (----@)1

.94 (25.21) SOC2 .94 (25.21)

SOC2
.87 (21.48) SOC
.87 (21.48) SOC SOC3
SOC3 .83 (19.43)
.83 (19.43)
SOC5 .75 (16.39)
SOC5 .75 (16.39)
.72 (11.93)
SOC6
SOC6 .55 (6.80)
ECO1 .62 (----@)1
ECO1 .62 (----@)1
ECO2 .85 (11.79)
ECO2 .85 (11.79) .90 (12.17) .77 (9.57)
ECO CSD
ECO3
.90 (12.17) .64 (8.62) .62 (9.40)
ECO
ECO3
.62 (9.40) ECO4 .67 (9.98)

ECO4 .67 (9.98)

ECO5
.89 (14.72)
ECO5 ENV2 .88 (----@)1
.69 (7.63)

ENV2 .88 (----@)1 ENV4 .92 (25.29)

ENV4 .92 (25.29)
.86 (21.78) χ2/d.f. = 4.02
ENV
ENV5 GFI = 0.87
.91 (24.15)
SRMR = 0.063
RMSEA = 0.098
ENV6 .85 (21.03)
NFI = 0.96
ENV7
CFI = 0.97
Fig. 1 First-order model of CSD (1 Numbers outside parentheses are
standard loadings; numbers in parentheses are t values; all loadings
are significant at the 0.001 level; - - -@ Values were not calculated
because loading was set to 1.0 to fix construct variance)
1989), because a second-order model can never exhibit
improved fit statistics compared with a first-order model
(Doll et al. 1994). The validity of the second-order model
was thus subjected to the following two additional tests.
Efficacy Testing
The efficacy of the second-order construct (CSD) could be
measured by computing a target (T) coefficient, which is the
ratio of the chi-squares of the first- and second-order models
(Marsh and Hocevar 1985). The upper bound of the T coef-
ficient is 1.0, a higher number indicating a more effective
representation. Figures 1 and 2 indicate that the respective
chi-square values for our model were identical. Our T
coefficient was equal to 1.0, meaning that our second-order
construct (CSD) perfectly explained the first-order con-
structs (SOC, ECO, and ENV), and thus was a valid and
parsimonious representation of the relationships between
them (Marsh 1987; Smith et al. 2009). This result also
implies that our two models were equivalent (Henley et al.
2006; Shook et al. 2004). We thus concluded that our second-
order construct of CSD represented the first-order constructs
χ2/df = 4.02
.86 (21.78) ENV GFI = 0.87
ENV5 SRMR = 0.063
.91 (24.15)
RMSEA = 0.098
ENV6 .85 (21.03) NFI = 0.96
CFI = 0.97
ENV7
Fig. 2 Second-order model of CSD (1 Numbers outside parentheses
are standard loadings; numbers in parentheses are t values; all
loadings are significant at the 0.001 level; - - -@ Values were not
calculated because loading was set to 1.0 to fix construct variance)
perfectly. Our model revealed that ENV had the highest path
coefficient (r = 0.89), followed by ECO (r = 0.77), and
SOC (r = 0.72). These results are particularly intriguing,
suggesting that although ECO and SOC play key roles in
CSD, ENV (such as improved ecology and decrease in pol-
lution) is likely to be the most important dimension of CSD
being emphasized in mainland Chinese organizations.
Predictive Validity
To complete our second-order test for CSD, we also tested
for its predictive validity (Tojib et al. 2008). This seeks to
evaluate whether measures behave in accordance with the
theory that divides the measurement exercise (Bagozzi
1981). To assess the predictive validity of CSD, this study
assumed that there was a positive relationship between
CSD and FINP (e.g., Chang and Kuo 2008; Enticott and
Walker 2008; Porter 1985). Hence, it is expected that a
positive relationship between CSD and FINP did exist.
Cronbach’s alpha of FINP was 0.92, which suggested that
the four measurement items (i.e., sales growth, earnings
growth, market share change, and returns on investment)
were highly reliable. As expected, there was a strong
positive correlation between the two constructs. The

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528
correlation result is as follows: r = 0.63, n = 314,
p \ 0.01. Thus, we concluded that our second-order model
of CSD passed the predictive validity test.
Discussion and Implications
Although strategic management researchers have lately
focused on qualitative approaches, such as case studies, to
assess CSD in different business applications (Erol et al.
2009), this article extends the basis of CSD research by
verifying that it can be efficiently represented by an inte-
grated construct of three dimensions, which are SOC, ECO,
and ENV.
This study conceptually defined the domain of the CSD
construct and tested the validation of the observable and
assessable indicators. The result is a parsimonious 15-item
instrument with three subscales (SOC, ECO, and ENV)
tapping into the dimensions of CSD. The development of
such multi-dimensional conceptualizations was able to
capture the multiple aspects of CSD. The CSD scale
developed in this study is an important step, since a psy-
chometrically sound measurement is a prerequisite for any
theoretical advancement (Schwab 1980). Our findings thus
provide a better understanding of CSD, which comprises
three empirically distinguishable dimensions (SOC, ECO,
and ENV). We further confirmed the stability of these three
dimensions using structural equation modeling. In addition,
rigorous analysis also revealed the existence of a second-
order model of CSD. Now, with a validated instrument for
measuring CSD, researchers will be able to undertake
studies to carefully examine the links between relevant
CSD-related variables such as organizational performance,
stakeholder integration, and organizational capabilities.
For practitioners, developing and empirically confirming
the existence of the three CSD dimensions and their inte-
grated relationships has provided a better understanding of
the strategic applications of CSD so as to promote devel-
opment of strategic management competencies. Our results
indicate that organizations should be concerned about all
these issues rather than one dimension in particular. Fur-
thermore, organizations could benchmark existing CSD
policies by using the dimensions noted here with the goal
of ascertaining whether their approaches are complete. We
also confirmed that ENV plays a more important role than
ECO or SOC in CSD practices in Chinese organizations.
Conclusion
The primary aim of this study was to verify the proposition
that CSD could be modeled by integrating three dimen-
sions, namely SOC, ECO, and ENV. Prior to testing our
123
W. S. Chow, Y. Chen
model, we further developed and validated measurement
items for these dimensions based on experiences from
mainland Chinese managers. These measurement scales
can therefore be used with confidence by both academics
and practitioners. We also confirmed through rigorous
statistical tests that CSD could be represented by a second-
order construct, meaning that a CSD construct could be
modeled by integrating the dimensions of SOC, ECO, and
ENV. Our research thus allows researchers and practitio-
ners to gain a clearer understanding of how to apply the
theory of CSD more directly and economically.
Our study also has two methodological limitations. First,
all data were gathered from single respondents at one time,
which could create a potential bias. And second, although
our research findings indicated a very good fit for all tested
criteria, two particular points may be made for future
studies. The first is sample size. It is recognized that the
significance of the chi-square index is subject to, and sen-
sitive to, sample size (Hair et al. 2010). Practitioners should
be aware that a good-fitting model could be rejected merely
because of small differences between the observed and
predicted covariance matrixes in a large sample. In contrast,
ill-fitting models may be accepted as having adequate fit if
the sample is small (Bentler and Bonett 1980). Future work
should test the instrument we have developed using dif-
ferent sample sizes to ascertain the generalizability of the
findings across organizations. The second point is cultural
differences. Our study tested measurements of CSD based
on mainland Chinese companies, which has enriched our
understanding of CSD in a non-Western context. But given
the perceptual nature of the data used to describe the the-
oretical construct, it is important to recognize the problems
associated with cross-cultural and cross-regional issues
(Chow et al. 2008; Bhalla and Lin 1987). Further research
should connect the Chinese and Western contexts to guar-
antee the accuracy of the results of this study.
Our study has concentrated on how organizations practice
CSD. When businesses globalize, a firm’s decisions about
CSD may depend on the policies of trading partners and local
authorities. This is especially true for supply chain applica-
tions. We thus suggest that it would be valuable to examine
how organizations can be influenced by their trading parties
(and vice versa) and by local sustainable policies (Huber and
Power 1985; Phillips 1981). Furthermore, we considered
only three dimensions of CSD in this study; future studies
may expand our model to consider other relevant CSD
dimensions such as technology (Hill and Bowen 1997),
institutions (Labuschagne et al. 2005), and so on.
Appendix
See Tables 6, 7, 8.
 Table 6 Literature review on the measurement items of CSD
Constructs Code Measures P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 P13 P14 P15 P16 P17 P18 P19 P20 P21 P22 P23 P24 P25

SOC SOC1 Improve health and safety 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4

SOC2 Recognize and act on the need to 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
fund local community initiatives
SOC3 Protect claims and rights of 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
aboriginal peoples or local
community
SOC4 Show concern for visual aspects of 4 4 4 4
facilities and operations
4 4 4 4 4 4 4 4
Corporate Sustainable Development

SOC5 Make public disclosures

SOC6 Consider stakeholder interests 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
ECO ECO1 Sell waste products for revenue 4
ECO2 Reduce cost of input 4 4 4 4 4 4 4 4 4 4 4 4 4 4
ECO3 Reduce cost of waste management 4 4 4 4 4 4 4
ECO4 Connect with government over 4 4 4
company interests
ECO5 Apply spin-off technologies to other 4 4 4 4 4 4 4 4 4 4 4 4 4 4
areas
ECO6 Differentiate products/processes 4 4 4 4 4
ENV ENV1 Reduce energy consumption 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
ENV2 Reduce waste and emissions from 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
operations
ENV3 Reduce impact on animal species and 4 4 4 4 4 4 4 4 4 4 4 4
natural habitats
ENV4 Reduce environmental impacts of 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
products/services
ENV5 Establish environmental partnerships 4 4 4 4 4
ENV6 Reduce risk of environmental 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
accidents, spills, and releases
ENV7 Reduce purchases of non-renewable 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
materials, chemicals, and
components
ENV8 Reduce use of traditional fuels by 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
substituting less polluting energy
sources
ENV9 Undertake voluntary actions for 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
environmental restoration
ENV10 Undertake environmental audit, 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
public disclosure, employee
training, and immunity

Note: P1, Amaral and Rovere (2003); P2, Azapagic (2004); P3, Bansal (2005); P4, Baumgartner and Ebner (2010); P5, Chan (2005); P6, Collins et al. (2007); P7, Erol et al. (2009); P8, Geibler et al. (2006); P9, Halme
et al. (2006); P10, Hussey et al. (2001); P11, Jones and Comfort (2005); P12, Labuschagne et al. (2005); P13, Lindgreen et al. (2009); P14, Milne et al. (2003); P15, Murillo-Luna et al. (2008); P16, Nordheim and
Barrasso (2007); P17, Rueda-Manzanares et al. (2008); P18, Schianetz and Kavanagh (2008); P19, Sharma (2000); P20, Sharma et al. (2007); P21, Sharma and Vredenburg (1998); P22, Steurer et al. (2005); P23, Tanzil
and Beloff (2006); P24, Veleva and Ellenbecker (2001); P25, Vera and Langlois (2007)
529

123
530 W. S. Chow, Y. Chen

Table 7 Questionnaire of CSD dimensions and their measures

Social development (7-point Likert scale; 1 = a small extent, 7 = a larger extent)
SOC1 Our firm improved employee or community health and safety
SOC2 Our firm recognized and acted on the need to fund local community initiatives
SOC3 Our firm protected claims and rights of aboriginal peoples or local community
SOC4 Our firm showed concern for the visual aspects of the firm’s facilities and operations
SOC5 Our firm communicated the firm’s environmental impacts and risks to the general public
SOC6 Our firm considered interests of stakeholders in investment decisions by creating a formal dialog
Economic development (7-point Likert scale; 1 = a small extent, 7 = a larger extent)
ECO1 Our firm sold waste product for revenue
ECO2 Our firm reduced costs of inputs for same level of outputs
ECO3 Our firm reduced costs for waste management for same level of outputs
ECO4 Our firm worked with government officials to protect the company’s interest
ECO5 Our firm created spin-off technologies that could be profitably applied to other areas of the business
ECO6 Our firm differentiated the process/product based on the marketing efforts of the process/product’s environmental performance
Environmental development (7-point Likert scale; 1 = a small extent, 7 = a larger extent)
ENV1 Our firm reduced energy consumption
ENV2 Our firm reduced wastes and emissions from operations
ENV3 Our firm reduced impact on animal species and natural habitats
ENV4 Our firm reduced the environmental impacts of its products/service
ENV5 Our firm reduced environmental impact by establishing partnerships
ENV6 Our firm reduced the risk of environmental accidents, spills, and releases
ENV7 Our firm reduced purchases of non-renewable materials, chemicals, and components
ENV8 Our firm reduced the use of traditional fuels by substituting some less polluting energy sources
ENV9 Our firm undertook voluntary actions (e.g., actions that are not required by regulations) for environmental restorations
ENV10 Our firm undertook actions for environmental audit, public disclosure, employee training and immunity

Table 8 Assessment of the convergent validity of the CSD dimensions: Description and rationale of the procedure
Construct Statistical results and substantive supports

SOC 1. Statistical result: After modification, five items were retained: SOC1, SOC2, SOC3, SOC5, and SOC6. SOC4 was removed, and
model fit indices were v2/df = 2.85, GFI = 0.98, SRMR = 0.018, RMSEA = 0.077, NFI = 0.99, CFI = 0.99
2. Substantive support: The meaning of SOC4 could be covered largely by SOC2, SOC5, and SOC6, which measure an
organization’s concern about external community initiatives, the environmental impacts of operations, and stakeholder interest by
transparent formal dialog. Thus, we removed SOC4
ECO 1. Statistical result: After modification, five items were retained: ECO1, ECO2, ECO3, ECO4, and ECO5. ECO6 was removed.
Model fit indices were: v2/df = 1.64, GFI = 0.99, SRMR = 0.022, RMSEA = 0.045, NFI = 0.99, CFI = 1.00
2. Substantive support: ECO6 measures the extent to which organizations could differentiate their process or products based on the
marketing efforts of their environmental performance. The meaning of ECO6 could also be measured by other items such as ECO1,
ECO3, and ECO5, which in part measure how organizations improve revenue and operational costs by managing waste via
technology that related to environmental performance. Improved environmental performance through waste management and
technology could in turns differentiate the process/product of the organization. Thus, we removed ECO6
ENV 1. Statistical result: After modification, five items were retained: ENV2, ENV4, ENV5, ENV6, and ENV7. ENV1, ENV3, ENV8,
ENV9, and ENV10 were removed, and model fit indices were v2/df = 3.04, GFI = 0.98, SRMR = 0.012, RMSEA = 0.080,
NFI = 0.99, CFI = 0.99
2. Substantive support: First, our results revealed the same outcome as Chan (2005), in which ENV8 and ENV10 were deleted in the
process of the interview. This means that ENV8 and ENV10 were not strongly related to ENV in Chinese firms. In line with items
in Sharma and Vredenburg (1998), the meaning of ENV1 could be covered largely by ENV2, ENV4, and ENV7 in actions such as
adopting a comprehensive product life cycle analysis, combining functions of more than one product, changing process technology,
making product specifications, making input material specifications, reducing total materials used, and so on. Following the same
rule, ENV3 and ENV9 could also be covered largely by ENV2, ENV4, and ENV5 in actions such as refining facilities, treating
hazardous/toxic wastes, making technology and research alliances with other companies on oil and gas production, eliminating
packaging that damages the ozone layer, making production processes less environmentally damaging, and so on. Thus, we
removed ENV1, ENV3, ENV8, ENV9, and ENV10

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