Assessing the impact of environmental management systems on corporate and environmental performance

TLDR

Interest in corporate waste reduction has grown, leading to ISO 14001‑based environmental management systems that are assumed to lower pollution and enhance overall firm performance. This study tests the assumption that implementing an EMS improves corporate performance. Using a survey of North American managers, the authors compare the effects of formal uncertified EMSs with those of formally certified systems on firm attitudes and performance. Results show that firms with formal EMSs—especially certified ones—report broader operational benefits, stronger performance gains, and greater use of environmental options, underscoring the need for further research.

Abstract

Abstract There has been an increase in interest towards corporate activities aimed at reducing or eliminating the waste created during the production, use and/or disposal of the firm’s products. Prior research has focused on the need for such activities, while current research tries to identify those components that encourage or discourage such activities. As a result of the introduction of ISO 14001, attention has turned to corporate environmental management systems (EMS). The underlying assumption is that such a system is critical to a firm’s ability to reduce waste and pollution while simultaneously improving overall performance. This study evaluates this assumption. Drawing on data provided by a survey of North American managers, their attitudes toward EMS and ISO 14001, this study assesses the relative effects of having a formal but uncertified EMS compared to having a formal, certified system. The results strongly demonstrate that firms in possession of a formal EMS perceive impacts well beyond pollution abatement and see a critical positive impact on many dimensions of operations performance. The results also show that firms having gone through EMS certification experience a greater impact on performance than do firms that have not certified their EMS. Additionally, experience with these systems over time has a greater impact on the selection and use of environmental options. These results demonstrate the need for further investigation into EMS, the environmental options a firm chooses, and the direct and indirect relationships between these systems and performance.