Keywords
environmental product policies
innovative firms
sustainability
green product strategies
How to Cite
Abstract
Although companies are increasingly expected to implement environmental product policies (EPP), many find it difficult to translate general sustainability goals into concrete product-related actions. This challenge is particularly relevant for innovative companies, where product strategies evolve rapidly and require structured risk-based decision-making. This study examines how three activities of the risk management process—risk identification (RI), risk assessment (RA), and risk monitoring (RM)—support the implementation of EPP and whether enterprise risk management (ERM) acts as a mechanism linking risk practices with environmental product strategies. The study uses a quantitative design and employs PLS-SEM to analyse survey data from 587 respondents representing innovative companies. The model tests both the direct impacts of RI, RA, and RM on EPP and the indirect effects through ERM as a mediating construct. The results show that ERM significantly enhances the implementation of EPP, indicating that structured enterprise-level risk management supports environmental initiatives such as eco-design, energy reduction, and waste management. Among the risk management activities examined, RM is the strongest driver of ERM, followed by RA, confirming that continuous monitoring and evaluation are crucial for integrating sustainability into product-related decisions. RA and RM also show a moderate direct impact on EPP, while RI has a weak effect, suggesting that risk identification alone does not lead to effective implementation of environmental policy without coordinated ERM practices. This study extends sustainability and risk management research by explaining how ERM translates risk management processes into practical green product policies in innovative firms. The findings clarify why monitoring- and evaluation-based procedures are more influential than awareness-based practices and provide a structured framework for improving EPP implementation through enterprise-level risk management systems.
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