2.1. Literature Review
The environmentally responsible behavior of firms has been explored from multiple perspectives in existing research. Prior studies have provided several frameworks or models, suggested several effective mechanisms, and provided contextually situated solutions to mitigate emission-relevant concerns. We briefly review important themes next.
In terms of frameworks or models, the relationship among environmental regulations, environmental strategies, and the corporate performance of environmentally responsible systems is explored sparsely. For example, a prior study has assessed the economic aspect and environmental performance associated with environmental regulations and strategies and explored the driving factors of the producer-extended responsibility system, which includes government regulations and incentives, consumer demand pressure, and the internal environment of the enterprise management [
11]. Based on the perspective of government regulation theory, another study [
12] built a theoretical model to demonstrate the role of environmental regulation (intellectual property protection and social responsibility supervision) in improving the innovation performance of small and medium-sized enterprises (SMEs).
The existing literature has noted some effective mechanisms for firm-level responsible behavior. Research has examined the impact of environmental regulation (pollution charge) on green technology innovation and the mediating role of corporate environmental responsibility [
13]. A prior study explored the influencing mechanism of environmental regulation on corporate green innovation and the moderating mechanism of CSR disclosure by constructing a nonlinear fixed-effect regression model [
14]. Research has also proposed to pay attention to the promotion of environmental regulation, encourage enterprises to carry out green innovation activities actively, continue to deepen the market-oriented reform of energy prices, increase credit support, and introduce financial resources for corporate R&D activities to explore policies to improve the efficiency of regional green innovation [
15]. A recent study explored the ideal collaborative governance framework in the process of collaborative environmental governance, as well as the difficulties and optimization paths of collaboration, and put forward corresponding suggestions for the current environmental governance [
16].
Contextual investigations around firm-level environmental sustainability adherence have given nuanced insights. Based on manually collected data from China’s A-share listed companies from 2010 to 2017, an existing study [
17] investigated the effect of corporate political connections (PCs) on corporate environmental protection-related investment (EPI). The impact of public environmental concern on corporate green investments from the perspective of CEO turnover, using the extreme event of the PM 2.5 surge at the end of 2011 in China as a quasi-natural experiment, was the topic of investigation in a prior study [
18]. Another study used a novel and comprehensive dataset to investigate the influence of corporate environmental responsibility on the default risk of listed firms in China [
19]. Taking China’s A-share listed companies from 2014 to 2018 as the research sample, a recent study analyzed the mediating effect of enterprise peer influence in carbon disclosure [
20]. Based on the data of Chinese A-share listed firms in heavily polluting industries, another study explored the influence of green finance on corporate environmental responsibility (CER) performance [
21]. Furthermore, research has also explored the effectiveness of specific orders, such as a study reviewing the implementation effectiveness of the “Plastic Prohibition/Restriction Order” since 2007 in China [
22].
Thus, the extant research motivates and posits a gap to identify factors associated with firm-level responsible behavior in different country settings. Identifying the factors influencing specific tools’ and applications’ implementation to mitigate environmental concerns will help governments and industry sectors to follow some aspirational measures. Following the dual model [
23], this study examines the perceived benefits as affordance factors and perceived pressures as constraint factors. This paper also aims to identify the logic behind the seemingly contrasting dual model by studying the mediating role of herd behavior. In addition, this research tries to address this gap in the context of firms in China and South Korea, considering the country-level regulations and environmental responsibilities of firms. In the following sections, we examine the key constructs, develop the hypotheses, and review the relevant regulations.
2.2. Affordance Factors: Perceived Benefits
The affordance-based perceived benefits associated with a system’s adoption are direct accrued benefits for a firm. The motivations for GHG Protocol Tool adoption should follow similar ones ascribed to environmental or green information or management systems’ adoption in prior research. These include reduced pollution, energy, and material consumption; the avoidance of environmental risks, accidents, and hazards [
3,
24]; the plausible improvement of environmental performance [
25,
26]; and overall ecological commitments, responsibilities, and credibility [
27]. With environmental considerations, companies intend to do the right thing for the environment [
28] and thus should aspire to achieve ecological benefits [
29]. Other benefits of adopting such systems include cost reductions [
9,
30], efficiency and waste improvements [
24,
26], and reductions in fines and legal fees [
31]. Such systems also help in obtaining managerial benefits, such as detecting and minimizing environmental and liability risks and enhancing the process and product environmental innovation [
7]. The benefits also include assisting management in dealing with environmental issues, reducing disputes with the public on ecological pollution [
7], establishing eco-effectiveness, and, more specifically [
31], reducing the GHG emissions [
1]. Along with this, prior research has also substantiated the direct benefits of such systems, such as an increase in profits [
9] and business benefits or performance [
3,
32].
Organizations initiate environmental or green initiatives and start thinking responsibly because they face policy or societal pressures or wish to improve their corporate reputation [
24]. In both cases, organizations care about their benefits. It is the desire to implement practices and technologies to improve environmental sustainability out of deep concern for the natural environment [
33]. A recent study has empirically shown that environmental and economic performance are positively linked, even though firms perceive sustainability as a liability [
9]. The perceived ecological benefits can motivate environmental strategies in the numerous factors influencing an organization’s environmental strategy [
34]. The idea that businesses and organizations generally have more than mere financial responsibilities is not new [
35]. Some researchers have even reported that the overarching incentive for business is what makes good business sense to pursue strategies for a sustainable world [
25].
For the GHG Protocol Tools, the environmental benefits are GHG mitigation benefits of integrated air pollution and greenhouse gas reduction strategies and measures for the energy sector. At the same time, energy consumption will be reduced in the GHG mitigation process due to the highly positive relationship between GHG mitigation and energy saving. Environmental benefits of GHG Protocol Tools include preventing pollution, minimizing the ecological footprint, and developing environmentally friendly competencies [
1].
Financial benefits are extrinsic and gained whenever an activity is done to attain different outcomes [
36]. It is one of the most effective ways to motivate organizations, especially business organizations, to engage in environmentally friendly practices. It is easy to understand that if a business organization conducts some environmental sustainability strategies, the penalties from the government and senior organizations will be reduced. Thus, the company will have the motivation to adopt GHG Protocol Tools because of the penalty reduction, which is one financial benefit that GHG Protocol Tools can provide. Previous studies also identified saving time as one financial benefit of green information systems [
37]. In the context of GHG Protocol Tool usage, we can expect timesaving to be one financial benefit. For example, by using GHG Protocol Tools, organizations can estimate the future situation through the scenario, grasp the current situation through emission analysis, and save time in their benchmarking pursuits [
38]. Thus, financial benefits become the driving force for organizations to have the intention to use GHG Protocol Tools.
GHG Protocol enables a standard that is quickly followed in the management process. From this perspective, the perceived managerial benefits of GHG Protocol are management capability improvements, improved documentation, and increased organizational efficiency [
27,
31,
39,
40]. Furthermore, GHG Protocol Tools are used explicitly in environmental management. From this perspective, GHG Protocol Tools may provide managerial benefits such as detecting and minimizing ecological and liability risks and enhancing process and product environmental innovation. In previous research, all these benefits led to the usage intention of the system or technology. Thus, we argue that a positive relationship exists between the perceived benefits and intention to use GHG Protocol Tools.
Hypothesis 1. Perceived benefits will be positively associated with the intention to use GHG Protocol Tools.
2.3. Constraint Factors: Perceived Pressures
From the dual model perspective, not only the affordance-based perceived benefits can positively influence the usage intention of GHG Protocol Tools, but also constraint-based perceived pressures can positively affect the usage intention of GHG Protocol Tools [
24]. To measure and analyze the effects of constraint-based perceived pressures, this study identifies three critical second-order constructs of perceived pressures from the previous literature. The three second-order constructs are societal pressure, organizational pressure, and regulatory pressure.
Prior research also suggests that factors such as civic responsibility [
25], the social contract [
41], social responsibility [
42], social norms [
43], social acceptance, and public image [
28] have impacts on environmental or green information or management system adoption. Therefore, this study proposes that one of the constraint-based pressures is societal pressure. For example, corporate image is improved by social responsibility, societal drivers [
27], compatibility with existing beliefs and values, self-image, and brand loyalty. Similarly, goodwill from the customer and community, improved relations with the community and other stakeholders [
31,
44], and enhanced reputation [
24] are significant reasons for which businesses adopt environmental or green information or management systems in prior research.
As a critical part of the institutional pressure based on institutional theory, organizational pressure is also proposed as one constraint-based pressure in this research. Previous researchers had different focuses on this term. Some emphasized strong leadership [
34], and some defined it as the pressure exerted by another organization [
37]. On the other hand, in the EMS adoption process, searching for competitive advantages, matching competitors’ actions [
3], and environmental-related trade barriers [
24] are appropriate influencers. Along the same line, benchmarking with other organizations [
44] has already been discussed as a significant influencer in existing research.
For business organizations, the company’s leadership team exerts pressure on the whole body of the company; external pressure may come from other business organizations. Thus, the organizational pressure can be vertical and horizontal. In most situations, researchers believe that governments place regulatory pressure on businesses because of the governance nature of government organizations [
25] and the various regulations and legitimations implemented by governments [
45,
46].
Prior research identified the effects of sociocultural influences on adopting information systems, which reflect the environmental values, beliefs, and trends in society [
47]. This influence is highly related to the impacts of media and organizations’ needs for social legitimacy [
34]. In responding to the increased social, cultural, and legislative pressures that expand the responsibility of firms to increase their attention to environmental concerns [
48], chief executives have increasingly committed to environmental or green information or management systems for sustainability transformation efforts [
25]. In some countries, this rate is reported to be as high as 60 percent [
49]. Another situation in which society may exert pressure on an organization is social responsibility. Among the forces driving changes, social responsibility requirements are becoming more urgent due to the rapid depletion of natural resources and the increasing concerns over corporate social responsibility [
35]. Sustainability has increasingly become critical to business research and practice over the past few decades due to the rapid depletion of natural resources and concerns over wealth disparity and corporate social responsibility. Researchers have acknowledged that a socially responsible company must do more than make a profit [
35]. Previous authors have suggested that institutional theory is an appropriate vehicle when investigating how institutional forces lead a firm to be responsive to the needs of others in society. Business organizations are becoming accountable for their environmental and social responsibilities and financial obligations of maximizing profits [
50]. The trend toward corporate social and environmental responsibility is noted in prior studies [
51,
52]. In practice, it is now expected that many business enterprises describe policies or measures aimed at environmental sustainability as part of their annual statements on CSR or in special corporate sustainability reports [
47]. For businesses, environmental sustainability is integral to the movement toward corporate social responsibility [
42].
Organizational pressure belongs to the coercive pressure category, one type of institutional pressure. It is exerted by organizations such as governmental agencies or more powerful business partners, on which the decision-maker either depends or competes [
37]. Research has acknowledged that addressing sustainability issues is critical to companies’ long-term existence and thriving [
35]. There can be many choices for organizations to set up environmental strategies. Nevertheless, one of the best choices will be green information systems. Recent research has shown that competition in the business market has heightened since the mid-1990s, along with the investments and application of information systems in general [
53]. Therefore, most companies will choose green information systems to face organizational pressures. Adopting the previous literature, the definition of regulatory pressure in this study is the pressure that businesses and institutions must exert to comply with the regulations [
54]. Inside business organizations, they have their indicators for environmental protection performance [
34]. As the bridge between external and internal rules, senior managers’ attitudes toward adopting green information systems may change due to pressure from regulatory bodies and influence the regulation inside business organizations [
33].
Coercive pressure derived from regulatory bodies will occur mainly in the most regulated fields. Hence, environmental issues are considered negative externalities, forcing senior managers to improve the firm’s environmental performance. Prior work [
55] argued that coercive pressures similarly affect all companies, leading to the regulation of adaptive processes. Therefore, we expect that managers of companies affected by coercive pressure will develop a positive attitude to the adoption of green information systems, resulting in both environmental and commercial benefits. The regulation was suggested as one reason for the environmental practice initiative because the firms wish to avoid sanctions and punishments in the form of penalties, fines, or withdrawal of licenses due to non-compliance with environmental regulations [
56]. Previous researchers found that regulatory pressures are often associated with an organization’s decision to adopt environmental practices, and these pressures arise from threats of non-compliance penalties and fines [
27]. Increased demand has been placed on the manufacturing industries to be more responsive to their environment concerning their product and processes. This demand is due to various antecedent factors driving sustainable environmental practices in manufacturing firms. However, ecological value is not only a concern of firms. The impacts of this environmental initiative on these firms’ performance are also substantial [
56]. Thus, we posit a hypothesis related to the relationship between perceived pressures and usage intention of GHG Protocol Tools as follows:
Hypothesis 2. Perceived pressures will be positively associated with the intention to use GHG Protocol Tools.
2.4. Herd Behavior: Imitating Others
Prior research suggested that these two mechanisms might influence the usage intention of environmental or green systems in different ways but reach the same result [
23]. Researchers also agreed that what needs to be done and how best to proceed are the most troubling problems for businesses under the requirement of an urgent response with many unknowns [
25]. Herd behavior can mediate uncertainty’s impact on information systems’ usage intention [
10]. Therefore, this research proposes the mediating effects of herd behavior in the relationship between constraint-based perceived pressures and usage intention of GHG Protocol Tools. Following a previous study [
10], we use the concept of imitating others to describe the herd behavior of technology adoption in this study.
Two possible contrasting mechanisms may occur in the adoption process of environmental or green systems. First, affordance-based benefits are direct enablers of adoption, so there can be a direct relationship between these factors and the usage intention. Previous literature on herd behavior indicates that this relationship is indirect for the other mechanism that presents the relationship between constraint-based pressures and usage intention [
10]. This study believes that this is the reason that two contrasting mechanisms can work in different ways but achieve the same result.
Herd behavior refers to the phenomenon that people behave in the same way as others, mainly as a group [
57]. We all have witnessed and participated in numerous situations where decision-making was strongly influenced by what others around us were doing, which is the effect of herd behavior. Herd behavior has been observed in a variety of situations, such as in choosing retirement investments [
58], opening new bank branches [
59], developing prime-time television programs [
60], and downloading software applications [
61,
62]. Prior work [
63] defines herd behavior in terms of three related aspects: (1) the actions and assessments of investors who make decisions early will be critical to the decisions of the majority; (2) investors may herd or organize their adoption behavior based on the wrong information, which may lead to the wrong decision; and (3) if they make the wrong decision, then experience or new information may cause them to reverse their decisions, and a herd may be created in the opposite direction. We adopt a more general view of herd behavior and consider it a manifestation of behavior conformity that may or may not require learning and information transmission among decision-makers.
Prior research has discussed two types of herding: reputation-based and compensation-based herding [
10]. Firstly, reputation-based herding is related to imitating others to avoid being considered incapable. Prior research stated that imitating others can enhance one’s intention to use technology. Secondly, the literature on compensation-based herding suggests that imitation is a driving force to avoid the competitive disadvantages of rejecting a specific technology. Notably, imitating others has a mediating effect on influencing uncertainty’s impact on the usage intention of the technology [
10].
The role of herd behavior in technology adoption has been discussed earlier in studies [
64] involving reputational herding, compensation-based herding, and information cascade-induced herding [
10]. Thus, imitating others is incorporated into the research model, aiming to explore how imitating others mediates the impact of perceived pressures on the usage intention of GHG Protocol Tools in this research. Observing others’ actions and uncertainty regarding the decision to be made are the two conditions for herd behavior, and they positively impact the imitation of others. Previous literature has documented the relationship between different types of pressure and imitating others—for example, societal pressure [
65], organizational pressure [
37], and regulatory pressure [
66].
People care about how using a specific technology will affect their image in their social systems [
10]. People attempt to avoid costs or blame for impropriate choices by imitating others. Therefore, this system would be the best choice if most other organizations used GHG Protocol Tools. Considering organizations’ pursuit of social acceptance and a good social image, imitating others will be a possible result under the societal pressure of organizations. To fully understand organizations’ imitations, we must look beyond their goals in the imitative situation and consider others’ goals toward them. Organizations must do things in the culturally prescribed manner that society often pressures them to imitate in a particular way [
67].
Under organizational pressure, organizations may pay attention to the number and identity of technology adoption predecessors [
10]. When numerous competitors and peers have adopted a system, non-adopters fear being perceived as less innovative or adaptable to external conditions [
40]. They will imitate the specific approach adopted by many organizations and organizations with good performance. On the other hand, people may follow a particular group of adopters defined as “power users” because of their unique leading identity [
68]. To avoid the embarrassment of being isolated and to follow the big names, non-adopters become adopters. With the advances of Internet technology and mobility improvements, it is straightforward for people to access predecessors’ decisions. Thus, these potential users are more prone to imitating others’ decisions. Organizations receive regulatory pressures, and they are urged to conduct some environmental practices, but there is no legislation mandating the use of a particular system. Therefore, if many organizations use GHG Protocol Tools, non-adopter organizations will imitate the adopters. Their choice will lead to the herd behavior of other organizations. If most of them are using GHG Protocol Tools, the non-adopter organizations will imitate them and intend to use GHG Protocol Tools [
10]. From observing others’ behavior and uncertainty about adopting Green IS, the companies may perceive pressure and imitate others. The more observed organizations are using or have a plan to use GHG Protocol and the more critical the observed organizations, the greater the possibility of the behavior to imitate others. When the uncertainty is high, a potential adopter can analyze and understand the real reason for the adoption and cannot accurately assess the potential utility of a particular system. Based on the points mentioned above, this study expects a positive relationship between perceived pressures and the behavior of imitating others.
Hypothesis 3. Perceived pressures will be positively associated with imitating others.
There are three types of herd behavior: compensation-based, reputation-based, and information-based [
10,
64]. This study believes that as one type of herd behavior, imitating others is even more critical for the usage intention of GHG Protocol Tools, not only for the competitive advantages, reputation, and social learning process. Managers imitate others’ decisions and are intentionally concerned about their careers in adoption herding to build their professional reputations and increase their human capital returns. Implicit incentives of career-concerned managers and informational asymmetries in systems adoption drive reputational herding. The financial returns of most systems or technological investments are hard to measure, especially in the short run. Thus, contractual incentive provisions become much more complex, strengthening incentives for managers to engage in reputational herding [
64]. Prior work [
69] also discussed the role of this reputational herding in the decision-making process in the audit area. Therefore, imitating prior adopters of GHG Protocol significantly and directly influences one company’s intention to use GHG Protocol Tools. In this research, it is proposed as a positive relationship between imitating others and the intention to use GHG Protocol Tools.
Hypothesis 4. Imitating others will be positively associated with the intention to use GHG Protocol Tools.
Based on the arguments and hypotheses presented, we developed a conceptual framework, shown in
Figure 1, and tested it using Structural Equation Modeling.
2.5. Country-Level Regulations and Environmental Responsibility of Firms
If GHG emissions at the sources can be measured and monitored, this will help to curb the emissions, which has become imperative for both the public and private sectors [
4]. Firms’ stakeholders are emerging and becoming responsible towards the environment, although these responsibilities vary broadly across countries. The environmental issue concerns many stakeholders who assess, monitor, and demand that corporations take action [
70]. Environmentally conscious groups have an increasing say in government regulations on greenhouse gas emissions from industries [
71]. Therefore, it is a corporate responsibility for all firms to manage GHG emissions-related disclosures. Firms need to develop proactive strategies for environmental issues and disclose GHG emission information to maintain their corporate reputation and manage government regulations in response to the demands of stakeholders.
Country-level regulations affect firms’ environmentally responsible behaviors. Many developing and developed nations adhere to international norms and stipulations for environmental responsibility, while others struggle with several mandatory norms. We briefly discuss South Korea and China’s country-level regulations that influence firm samples’ environmental responsibility in this study.
To exemplify the national challenges that countries are facing, South Korea experienced rapid economic growth and a doubling of its GHG emissions from 1990 to 2005, the fastest increase in emissions among OECD nations. In 2008, the GHG emission ranking of South Korea was 10th in the world, while the emissions per capita in South Korea were higher than in China (10.9 tons and 6 tons of CO
2 emissions per person, respectively) [
72]. In South Korea, corporate environmental responsibility is regulated by the Ministry of Environment through the Environmental Management Act and its accompanying regulations. These laws and regulations cover a wide range of activities, including managing air and water pollution, waste disposal, and the conservation of natural resources. Companies must obtain environmental permits for specific activities and are subject to inspections and penalties for non-compliance. Additionally, South Korea has implemented several voluntary programs, such as the Eco-Management and Audit Scheme (EMAS), to encourage companies to improve their environmental performance.
Examples of GHG emission regulations in South Korea are as follows. (1) The Greenhouse Gas Emission Trading Scheme (K-ETS): This is South Korea’s cap-and-trade system for reducing greenhouse gas emissions. It covers the power industry and buildings sectors and obliges companies to surrender allowances for each ton of CO2 that they emit. The allowances can be bought and sold in the market, and the system’s caps decrease over time. (2) The Renewable Portfolio Standard (RPS): This regulation requires electricity retailers to source a certain percentage of their power from renewable energy sources, to increase the share of renewable energy in South Korea’s power mix. (3) The Energy Conservation Act: This law aims to promote energy efficiency and conservation in South Korea and sets energy efficiency standards for various products and equipment. It also provides financial incentives and subsidies for energy-efficient technologies and practices.
In China, corporate environmental responsibility is regulated by the Ministry of Ecology and Environment (MEE) and its local branches. The primary laws and regulations that govern corporate environmental responsibility in China include the following. The Environmental Protection Law: This law sets out the general principles for environmental protection and establishes the legal framework for environmental regulation in China. It requires companies to take measures to prevent and control pollution and to bear responsibility for environmental damage caused by their activities. The Air Pollution Control Law: This law regulates the prevention and control of air pollution and requires companies to reduce their emissions of pollutants. Some other examples include the Water Pollution Control Law, the Solid Waste Pollution Control Law, and the Law on the Prevention and Control of Environmental Noise. In addition to these laws, China has implemented several policies and programs to encourage companies to improve their environmental performance, such as the “Green Credit Policy” and “Circular Economy Promotion Law”.
Examples of GHG emissions regulations in China are as follows. (1) The National Emissions Trading System (ETS): China’s national carbon market covers power generation, iron and steel, cement, and chemical industries. The ETS sets a cap on the total amount of CO2 emitted and allows companies to buy and sell emissions allowances to meet their reduction targets. (2) The Renewable Energy Law: This law sets targets for the proportion of renewable energy in the country’s energy mix and provides financial incentives for developing and using renewable energy sources. (3) The Energy Conservation Law: This law promotes energy efficiency and conservation in China and sets energy efficiency standards for various products and equipment. It also requires companies to disclose their energy consumption and provides financial incentives for energy-efficient technologies and practices. China is committed to curbing CO2 emissions before 2030 and plans to achieve carbon neutrality before 2060 under the Paris Agreement. The country has also set up a national carbon market and implemented several policies and regulations to promote low-carbon development and reduce greenhouse gas emissions.
However, it remains challenging for South Korean and Chinese firms to respond to the country-level higher echelons of mandates and regulations. Can they change their behavior easily when it comes to environmental responsibilities? If so, what underlying factors can help them to adhere to the responsibility norms? This study conducts a comparative analysis to examine the differences in factors that influence the adoption and implementation of GHG Protocol Tools—a critical aspect of curbing emissions and being environmentally responsible in firms located in these two countries.