Many governments seek to limit their environmental footprint, but this requires action by both large and small firms. Moreover, a more detailed explanation of the firm-level journey to net zero is still needed. This study examines (1) rural–urban differences in the adoption of environmental actions, (2) how these actions relate to firms’ strategic priorities and (3) whether the adoption of digital technologies moderates the relationship between strategic priorities and environmental actions.
Drawing on novel survey data from the State of Rural Enterprise covering 2,563 firms in England, this study introduces a Guttman scale to describe a continuum of environmental actions and to discriminate between those who chase “low-hanging fruit” and those who climb the ladder of environmental actions.
The Guttman scale results indicate more environmental actions among urban firms, as well as among firms with strong priorities, whether economic or environmental, that have adopted digital technologies. This study suggests that firms with greater economic performance, superior digital technology, greater innovation and more ambitious environmental aims were at the top of the ladder.
The contribution of this study is to describe the ladder of environmental actions using a Guttman scale, demonstrating how these steps relate to firms’ strategic priorities and are moderated by digital adoption. This study also employs the term “environmental orientation” (i.e. a firm’s proactive strategic stance towards the adoption and implementation of environmental actions) to better understand how rural and urban firms integrate sustainability into their strategy.
