Good management improves productivity, but it may worsen environmental performance

The reduction of greenhouse gas (GHG) emissions is an increasingly important policy objective for many governments, both in developed and developing economies. This is reflected, among other things, in the emergence of energy efficiency as a high-priority topic on the policy agenda. In manufacturing – one of the key sectors from the point of view of GHG emissions and energy intensity – improvements in energy efficiency can come about from upgrading or closing existing plants or adding new production capacity that uses more modern technology. Moreover, recent research has found that management practices – such as those focused on how a firm handles a process-related problem, collection of production indicators, the timescale and difficulty of its targets and incentives – also play a significant role in reducing the energy intensity of firms.