From Employee-Owners to Environmental Champions

When employees become owners, companies achieve measurably stronger environmental performance. Here’s how this ownership model drives sustainability excellence.

Jegoo Lee a hour ago Reading Time: 10 minutes

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A North Carolina engineering company slashed its waste to near-zero levels thanks to the active involvement and support of its employees. An Indiana consulting firm pioneered eco-friendly business practices, driven by the commitment and engagement of its employees. In Rhode Island, a local coffee shop enhanced its sustainability practices from bean to cup, and a restaurant group transformed hospitality waste into community resources, with employees playing a key role in both cases.

Behind these environmental achievements lies an important organizational catalyst: All four companies are 100% employee-owned.

Employee ownership has received growing attention recently as an alternative ownership model that could help address societal wealth inequity. What is less well understood is the effect that this model of ownership has on a company’s achievement in addressing environmental issues. When employees are not merely workers but owners with a direct stake in a company’s success, such organizations are able to unlock a powerful model of business engagement in environmental sustainability.

A new study I coauthored that was recently published in the journal Business & Society identifies a powerful link between employee ownership and environmental excellence. In our study, we compared the performance of U.S. public companies that have employee share ownership programs with those that don’t, using a number of environmental indicators, including adopting clean tech; reducing toxic emissions, packaging, and carbon emissions; implementing environmental management systems; and conserving water. We found that when employees become owners, companies achieve measurably stronger environmental performance: For every $83,571 of company stake allocated per employee, one additional indicator of environmental performance improves significantly. Surprisingly, the impact of employee ownership on a company’s environmental performance surpasses that of CEO ownership impact by 11%, even though executives typically drive corporate sustainability agendas. These findings hold across diverse ownership structures and withstand rigorous causality testing.

Why Employee Ownership Drives Sustainability

What transforms employee-owners into environmental champions? Researchers have uncovered useful clues that point to a relationship between ownership culture and environmental stewardship.

Research on employee ownership consistently shows that when employees hold a financial stake in their company, they align their personal values with organizational objectives and become more motivated to contribute to corporate goals and performance, participate in decision-making, share information, and report a positive workplace culture.

Rick Van Doel, the former president and CEO of Performance Validation, an employee-owned engineering consulting firm in Indiana, told me, “Our company’s employee ownership has not only provided employees with extrinsic motivation but also fostered intrinsic motivation, leading to high commitment. Moreover, involving employees in work-related decisions has cultivated a stewardship climate throughout the company.” As a result, employees have reciprocated the unconventional benefit of employee ownership with further commitment and contributions.

Similarly, employee-owners at EA Engineering, Science, and Technology, based in North Carolina, are actively engaged not only in managerial decision-making but also in efforts related to environmental sustainability. CEO and president Ian MacFarlane told me that “EA’s employee-owners are aware of key financial information, share in the risks, and are involved in work-related decisions. Within the employee ownership culture, employees experience psychological safety, which manifests in a high level of community-based attitude and voluntary engagement in environmental programs.”

These two cases exemplify how such an ownership model can facilitate active employee involvement in a company’s sustainability-related practices — a dynamic that is broadly true for responsible management practices more generally. For example, in a study I conducted, I found that employees with ownership stakes engage more actively in consumer-oriented responsibility — such as product and service quality, product safety, and customer protection — than those who aren’t employee-owners. A likely reason for this is the sense of shared fate that employee ownership instills: When employee-owners benefit from their company’s stability and the wealth-building it facilitates, they are more inclined to invest in its long-term success, which responsible practices support.

How Employee-Owners Lead Environmental Sustainability

Employee ownership has the benefit of aligning employees’ financial motivations with company performance and enhancing employee engagement in the company strategy. Employees with ownership stakes show a stronger sense of belonging and pride in their companies than those in conventional employment relationships, and that attitude naturally extends to corporate environmental initiatives.

The Newport Restaurant Group (NRG) in Rhode Island exemplifies this dynamic relationship between pride and performance. Across its network of 13 restaurants and a boutique hotel, employee-owners have supported innovative environmental initiatives like recycling cooking oil and implementing comprehensive composting programs. For these employee-owners, environmental stewardship is not just a corporate mandate; it’s a personal mission shared across every level of the organization.

As one manager at NRG explained, “What translates into a great experience for our guests is that everyone who is having an impact on their evening is an owner. … From the dishwashers to the general managers to the chefs, it’s an integral part to who we are. It’s everybody; it’s all in.” This testimony shows how employee ownership creates a unique dynamic: When every team member is an owner, their pride and personal stake in the company shine through in interactions with customers and community members, amplifying the goodwill the company aims to achieve with their environmental initiatives.

Practical Considerations of Employee Ownership

Although the companies discussed as examples here are 100% employee-owned, not all of them started that way, nor do companies have to be 100% employee-owned to experience the benefits that come with employee ownership. NRG, for example, issued 30% of its shares to employees in 1995 and evolved to 100% employee ownership over decades. The employee ownership and environmental excellence study I worked on shows that, among U.S. public companies with employee ownership, even modest increases in employee equity lead to stronger environmental performance. To improve sustainability outcomes, companies that don’t already have an employee share ownership program may consider establishing one, while those that already have one can enhance it by expanding the equity shared with employees.

Leaders need to consider three factors that are effective for strengthening corporate environmental sustainability when building and enhancing the employee ownership culture.

1. Aligning employee-owner passions via internal coordination. While shared ownership encourages responsible business practices, it also brings together individuals with varying sustainability priorities. Thus, rather than pursuing a one-size-fits-all approach, companies can create specialized environmental sustainability teams that tap into individual passions and capabilities. These focused groups — whether dedicated to renewable-energy adoption, waste reduction, or resource conservation — enable employee-owners to meaningfully contribute where they’re most knowledgeable and motivated and achieve a more profound impact. To orchestrate these efforts effectively, organizations can establish a sustainability steering committee that coordinates initiatives, shares best practices, and ensures that all environmental projects align with broader company goals.

EA Engineering, for example, splits its sustainability work into groups that focus on various aspects of sustainability, such as calculating and managing the carbon footprint of daily operations, integrating sustainability into core services through practices such as climate adaptation and green remediation, and coordinating environmental efforts across the organization. In this way, employees share expertise while ensuring that each environmental project advances companywide goals.

2. Amplifying environmental impact through stakeholder communication. The unique advantages in sustainability that employee-owned companies possess often remain hidden from key stakeholders. While research shows that external audiences — such as customers, suppliers, local communities, and government agencies — respond positively once they understand employee ownership, many companies miss opportunities to take full advantage of this significant blend of worker empowerment and environmental stewardship. By strategically communicating their distinctive approach to sustainability, employee-owned companies can build stronger community partnerships, enhance their reputation, and accelerate measurable environmental improvements.

This external engagement creates a virtuous cycle. As employee-owners see their company’s sustainability efforts recognized and celebrated by the broader community, their pride deepens and their commitment to environmental initiatives grows. This strengthened corporate identity transforms sustainability from a corporate initiative into a personal mission, driving more authentic and ambitious environmental engagement.

White Electric Coffee is a coffee shop in Rhode Island that was established in 2000 and has been worker-owned since 2021. Worker-owner Chloe Chassaing noted how the business’s “100% Employee-Owned” entrance sign sparks customer curiosity: “Customers inquire about what employee ownership means — and they genuinely love it when they learn.” The cafe strategically displays media coverage of its initiatives, from compostable cups to coffee-ground donations for urban farms. These touch points are catalysts for conversations between customers and employee-owners, who amplify White Electric’s environmental impact as they share their sustainability commitment directly with supportive clients, who may then spread the message further.

3. Sustaining collective environmental commitment. Successful employee-owned companies recognize that maintaining long-term environmental progress requires careful attention to team collaboration and shared accountability. While employee ownership often generates pride in corporate achievements, organizations must actively cultivate a mindset that harnesses this pride for sustained collective action and prevents individual complacency. By implementing transparent performance metrics and collaborative decision-making processes, companies can foster an environment where team members naturally support and inspire one another’s environmental contributions.

Creating structured opportunities for peer interaction and transparent performance tracking helps prevent free-riding and ensures that all team members actively contribute to environmental initiatives. Events like regular team gatherings where employee-owners showcase their individual contributions and share accountability for outcomes help maintain collective momentum toward sustainability goals. A dedicated sustainability engagement committee can strengthen this mutual accountability by reviewing participation levels, identifying areas where support is needed, and ensuring that every employee-owner demonstrates substantial engagement in the company’s environmental mission.

NRG’s CEO, Mick Lamond, described how employee ownership fosters a culture of shared responsibility and environmental engagement: “As a fully employee-owned company, we want to be a strong community partner through tangible actions, such as recycling cooking oil, maintaining organic gardens, and implementing energy reduction programs. Our transparent approach reinforces a self-polishing culture where mutual accountability drives continuous improvement.”

Transforming employees into owners is a compensation model that creates a unique advantage for companies pursuing environmental excellence. Research shows that the heightened sense of reciprocity and organizational commitment that emerges from ownership culture can drive employees to champion environmental initiatives and advocate for sustainable business practices.

For corporate leaders seeking to strengthen their environmental performance, employee ownership offers a strategic pathway that transcends traditional incentive structures. By embracing this model, companies can unlock their workforce’s full potential as environmental stewards, driving meaningful progress toward a more sustainable future. The employee-owner culture emphasizes shared ownership, empowering each employee to invest in collective outcomes rather than simply following corporate directives.

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