Environmental degradation has increased urgency for a transition to a low carbon, climate resilient and resource-efficient global economy. This new corporate environment leads to more capital-absorbing investments for “greener” products (Barbera and McConnell, 1990; Trumpp and Guenther, 2015). In these circumstances, 6 different stakeholders have proposed and implemented environmental policies such as (a) direct regulations, b) indirect regulations through environmental taxes, subsidies, 8 tariffs and quotas and c) promotion of voluntary agreements)in order to reduce the 9 burden on the environment. The effectiveness of these policies on firms’ behavior towards the environment depends on the response to two questions concerning the bidirectional relationship between corporate environmental (CEP) and corporate financial performance (CFP). Are resourceful firms more capable of responding to pressures from various stakeholders and overcome both the neoclassical trade-off between CEP15 CFP and the concentration of managers to their personal goals (managerial opportunism1 ), engaging in long-term and costly environmental performance 17 improving investments? At the same time, will the benefits from these investments lead to higher market share reducing costly conflicts with various stakeholders, environmental risk, and increasing production efficiency leading to better financial performance (Elsayed and Paton, 2005; Nelling and Webb, 2009)? In this context, environmental issues are confronted in management decision moving beyond the 22 ethical perspective to the promotion of a sustainable economic success (Ambec and 23 Lanoie 2008; Lacy, et al. 2010; Porter and van der Linde, 1995).