The Maritime Economist Magazine Spring 2015 | Page 8

THEMARITIME Economist

INPLAIN
Greening and performance
relativity
Dr Venus Lun, Director of Shipping Research Centre,
The Hong Kong Polytechnic University

ME Mag

Preamble

8

As one of the world’s most internationalized
industries, shipping deals with the transportation of
goods to facilitate global trade activities. Operators in
the shipping community can broadly be classified into
three categories: (1) first-party users that physically own
the cargoes for shipment, e.g., traders; (2) secondparty users that own facilities or vehicles to provide
shipping services, e.g., carriers; and (3) third-party
users that provide freight forwarding and logistics
services. Shipping activities contribute to specialization
and mass production. The importance of shipping has
increased in the past centuries as we have witnessed
the trends of industrialization, globalization, offshore
operations and adoption of outsourcing strategies.
With the significant growth in global trade volume,
the shipping community has pay more attention to
operate their shipping activities in an environmentally
friendly manner. Implementing green shipping
practice (GSP) to balance environmental performance
with improved financial performance are important
management issues facing many shipping firms.
Various institutional pressures and the balance
between environmental protection and firm
performance are the challenging issues facing many
shipping firms.
Shipping activities involve physical movement of
goods. Although shipping operations are beneficial
to global economic development through trade

facilitation, the shipping related activities cause such
environmental harm as CO2 emissions and waste
discharge. Public concerns about the environmental
shipping operations are on the rise. It is essential
for shipping firm to balance between environmental
protection and business operations. In this connection,
we propose the concept of Greening and
Performance Relativity (GPR) and use an inputoutput approach to investigate the relationship
between greening operations and firm performance
in shipping operations. In addition, we examine the
positive association between environmental and
financial performance outcomes, and empirically
validate them with survey data collected from shipping
firms in Hong Kong.
Conceptualization

The organizational capability to perform green
operations has evolved as a competitive priority
in the shipping community. The capability to
perform business activities in an environmentally
friendly manner in the shipping industry refers to as
“greening capability”. Greening capability is
concerned with implementing environmentally
sustainable businessroutines to perform shipping
operations. To develop the GPR, we first examine
the greening capability of shipping firms. Firm
capability can be defined as a colection of business
routines for producing significant outputs. In general,