Green initiatives and risks: unpacking the environmental and economic dynamics in the global F&B sector

Purpose: This study aims to investigate corporate environmental performance (CEP) as a strategic approach for firm risk mitigation in the global food and beverage (F&B) industry, highlighting how varying economic contexts shape the effectiveness of these strategies. Using a multi-theoretical framework that integrates the natural resource-based view (NRBV), stakeholder theory and institutional theory, it examines the effects of green initiatives, specifically environmental management performance (EMP) and environmental operational performance (EOP) on systematic and idiosyncratic risk.
Design/methodology/approach: This study analyzes panel data from 540 global F&B firms from 2015 to 2023 to investigate their effects on idiosyncratic and systematic risk using the system generalized method of moments (GMM).
Findings
EMP exhibits a statistically significant but modest negative effect on idiosyncratic risk. Economic development strengthens this relationship in more developed countries. Though EOP does not directly influence either systematic or idiosyncratic risk, a negative effect of EOP on both is observed when moderated by economic development.
Social implications: The study highlights how green initiatives in the F&B sector can contribute to reduced environmental harm, fostering healthier ecosystems, improving public health, and supporting the well-being of communities dependent on natural resources. Since environmental footprints disproportionately affect vulnerable populations, encouraging firms to adopt CEP globally can mitigate these inequities, ensuring more equitable social and environmental outcomes. Particularly in emerging markets, CEP could drive social progress by encouraging institutional development, job creation, and resource conservation.
Originality/value: The study addresses a relatively underexplored aspect of CEP, i.e. its influence on firm risk, specifically within the F&B sector. The introduction of economic development as a moderator integrates economic contexts into evaluating CEP’s strategic role in risk mitigation, demonstrating the varying effects of economic environment on environmental strategies. The integration of institutional theory with NRBV and stakeholder theory underscores the significance of institutional factors in shaping risk outcomes through their interaction with internal capabilities and stakeholder pressures. The dual dimensions of CEP highlight EMP and EOP’s differentiated risk mitigation effects on firm-specific and market risks.