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Environmental management systems: Does certification pay?

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  • Frondel, Manuel
  • Krätschell, Karoline
  • Zwick, Lina

Abstract

The voluntary adoption of environmental management systems (EMSs), frequently certified by third-party audits following international standards, has become a vital supplement to mandatory environmental policies based on regulation and legislation. Although there is empirical evidence that both EMS adoption and certification can effectively improve firms’ environmental performance, the impact on their business performance is far from clear. Drawing upon an OECD survey including more than 4000 manufacturing facilities, this paper fills this void by estimating the impact of both EMS adoption and certification on facilities’ business performance using statistical matching techniques. While providing for a didactic summary of matching methods, our results indicate that the pure adoption of EMS without any certification does not enhance facilities’ business performance, the financial performance of certified facilities turns out to be significantly higher.

Suggested Citation

  • Frondel, Manuel & Krätschell, Karoline & Zwick, Lina, 2018. "Environmental management systems: Does certification pay?," Economic Analysis and Policy, Elsevier, vol. 59(C), pages 14-24.
    • Handle: RePEc:eee:ecanpo:v:59:y:2018:i:c:p:14-24
    DOI: 10.1016/j.eap.2018.02.006
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    Cited by:

    1. Jing Wang & Yunshi Mao, 2020. "Pains and gains of environmental management system certification for the sustainable development of manufacturing companies: Heterogeneous effects of industry peer learning," Business Strategy and the Environment, Wiley Blackwell, vol. 29(5), pages 2092-2109, July.
    2. Qiang Zhang & Yuan Ma & Qiyue Yin, 2019. "Environmental Management Breadth, Environmental Management Depth, and Manufacturing Performance," IJERPH, MDPI, vol. 16(23), pages 1-11, November.
    3. Yuan Ma & Qiang Zhang & Qiyue Yin, 2019. "Influence of Environmental Management on Green Process Innovation: Comparison of Multiple Mediating Effects Based on Routine Replication," IJERPH, MDPI, vol. 16(22), pages 1-13, November.
    4. Tsalis, Thomas A. & Nikolaou, Ioannis E. & Konstantakopoulou, Fotini & Zhang, Ying & Evangelinos, Konstantinos I., 2020. "Evaluating the corporate environmental profile by analyzing corporate social responsibility reports," Economic Analysis and Policy, Elsevier, vol. 66(C), pages 63-75.
    5. Ivana Mijatovic & Milica Maricic & Ana Horvat, 2019. "The Factors Affecting the Environmental Practices of Companies: The Case of Serbia," Sustainability, MDPI, vol. 11(21), pages 1-17, October.
    6. Anton Nugent & Dragana Radicic, 2023. "The Impact of Environmental Management on Labour Productivity," Sustainability, MDPI, vol. 15(16), pages 1-16, August.
    7. Seles, Bruno Michel Roman Pais & Lopes de Sousa Jabbour, Ana Beatriz & Jabbour, Charbel Jose Chiappetta & Latan, Hengky & Roubaud, David, 2019. "Do Environmental Practices Improve Business Performance Even in an Economic Crisis? Extending the Win-Win Perspective," Ecological Economics, Elsevier, vol. 163(C), pages 189-204.

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    More about this item

    Keywords

    Environmental regulation; Matching methods;

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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