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Paper Number
1165
Paper Type
Completed
Description
Companies have increasingly adopted environmental management systems (EMSs) in response to the need for improving their environmental sustainability and accountability. EMSs enable companies managing their environmental activities, supposedly leading to improved environmental performance and cost savings. However, research findings regarding the effectiveness of EMSs on key environmental and financial performance measures are inconclusive. To address this puzzle, we collected data from various sources to analyze the relationships between EMS certification, environmental performance, and financial performance for the STOXX 600 using panel data regression covering six years. With this comprehensive, large-scale approach, we account for largely neglected indirect effects and widespread validity issues of prior research, such as cross-sectional designs, perception-based performance measures, and small sample sizes. Our results show that EMS certification has a significant positive effect on environmental performance, particularly on emission reduction. We did not find a significant effect of EMS certification and environmental performance on financial performance.
Recommended Citation
Huber, Maria; Ixmeier, Anne; and Kranz, Johann, "Reassessing the Puzzle of Environmental Management Systems and Their Impact on Firm Performance: A Panel Data Analysis" (2023). ICIS 2023 Proceedings. 8.
https://aisel.aisnet.org/icis2023/soc_impactIS/soc_impactIS/8
Reassessing the Puzzle of Environmental Management Systems and Their Impact on Firm Performance: A Panel Data Analysis
Companies have increasingly adopted environmental management systems (EMSs) in response to the need for improving their environmental sustainability and accountability. EMSs enable companies managing their environmental activities, supposedly leading to improved environmental performance and cost savings. However, research findings regarding the effectiveness of EMSs on key environmental and financial performance measures are inconclusive. To address this puzzle, we collected data from various sources to analyze the relationships between EMS certification, environmental performance, and financial performance for the STOXX 600 using panel data regression covering six years. With this comprehensive, large-scale approach, we account for largely neglected indirect effects and widespread validity issues of prior research, such as cross-sectional designs, perception-based performance measures, and small sample sizes. Our results show that EMS certification has a significant positive effect on environmental performance, particularly on emission reduction. We did not find a significant effect of EMS certification and environmental performance on financial performance.
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05-SocImpact