Understanding The Motives for the Adoption of Sustainable Practices: The Role of Expected Rewards, Risk Perception, and Risk tolerance

The purpose of this study is to examine firms’ motives underlying the adoption of sustainable practices. In particular, we focus on expected economic, social, and personal rewards. In addition, we examine the roles of owner-managers’ risk perception and risk tolerance. We find that the adoption of sustainable practices is affected by expected economic rewards, but not by social and personal rewards. The results also show that perceived risk is a major barrier to the adoption of sustainable practices and that risk tolerance strengthens the effect of expected economic rewards on the probability to adopt sustainable practices.