The lack of clarity in the environmental strategies has created uncertainty towards industrial efforts to protect the environment. However, some firms are more apprehensive regarding environmental protection in comparison to their counterparts. What determines the environmental proactiveness of these firms which go beyond extant laws to adopt proactive environmental strategies (PES)? This article, through an empirical study of the Indian cement sector, identifies the determinants of adoption of PES. Quantitative analysis of survey data from 310 respondents identifies four determinants; organisational capability, market benefits, stakeholder pressure, and environmental risk management. Four hypotheses are proposed to test the Confirmatory Factor Analysis (CFA) outcome. Organisational capability and market benefits are observed to be the key determinants. The study determines the strength of the identified determinants on PES adoption using structural equation modelling (SEM) and path analysis. Path analysis ranks the determinants in the order; organisational capability, market benefits, environmental risk management and stakeholder pressure. The evidence based findings from the research are expected to be useful for the environmental management practitioners as well as academicians. On the global front, the developing countries having identical socio-economic and political structure may gain from the findings of the study.

Introduction

Emission intensive cement sector, a critical sector forming the core of a nation’s infrastructure development has raised environmentalists’ concern towards environmental damage. Normally environmental compliance is observed to safeguard firms’ business interests. However, some companies go beyond the regulatory requirements to prevent and minimise the environmental damaged caused due to their operations. What determines the adoption of PES which are beyond regulatory compliance? Now a days, manufacturing processes are much cleaner and energy efficient due to new technologies and sustainability initiatives. As per the World Business Council for Sustainable Development, “concrete is the most widely used material on earth after water”. Cement contributes around 10 to 11 per cent of the concrete mixture. One ton of cement production releases approximate a similar quantity of CO2 into the atmosphere. Globally, of the total anthropogenic CO2 emissions, cement industries contribute approximately five to six per cent. Technology improvement is considered to be a critical factor by policymakers, technologists, and industries for a lasting and worthwhile solution to the environmental complications caused by industrial operations (Shrivastava, 1995). Adoption of cleaner technology is not as per expectations in spite of numerous benefits, both operational and strategic, to the adopters (Howes et al., 1996). World Commission on Environment and Development (WCED, 1987) drew serious attention towards environmental issues decades ago.