Why Environmental Governance Struggles to Transform: A Business Governance Perspective on Credibility-Scaling-Resilience across Firms

Abstract

The scope and ambition of environmental governance has grown, but with a variable ability to deliver credible and enduring environmental improvement.  This theory-building review analyses environmental governance through the Credibility-Scaling-Resilience framework, through the governance dilemmas that are enacted through firms and industries that translate regulatory expectations into practice. Drawing on fifteen empirical studies from Asia, Africa, Latin America, and emerging Europe, the review uses PRISMA-guided procedures combined with insights from institutional theory, stakeholder theory, legitimacy theory, and the resource-based view. The findings reveal that governance credibility is driven by firms' perceptions of enforcement consistency and stakeholder scrutiny, scaling by the extent to which practices are diffused across industries and value chains, and resilience by organizational capabilities that allow them to sustain environmental commitments when facing economic or institutional adversity. Firms are prone to respond symbolically and opportunistically when these governance dynamics are misaligned; but when they are reinforcing, more substantive forms of environmental practice are likely to emerge. The review extends the framework by grounding it in firm and industry-level governance dynamics, and offers insights for policymakers, regulators, industry associations, and corporate decision-makers who wish to improve their environmental governance performance.