Environmental Management Systems – Does Certification Pay?

28 Pages Posted: 18 Feb 2015

See all articles by Manuel Frondel

Manuel Frondel

RWI Leibniz Institute for Economic Research ; Ruhr University Bochum (RUB)

Karoline Krätschell

Ruhr University of Bochum

Lina Zwick

Rhine-Westphalia Institute for Economic Research (RWI-Essen)

Date Written: November 16, 2014

Abstract

The voluntary adoption of environmental management systems (EMS), 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 4,000 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 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.

Keywords: Environmental regulation; matching methods

JEL Classification: O33, O38, Q28

Suggested Citation

Frondel, Manuel and Krätschell, Karoline and Zwick, Lina, Environmental Management Systems – Does Certification Pay? (November 16, 2014). Ruhr Economic Paper No. 519. Available at SSRN: https://ssrn.com/abstract=2565706 or http://dx.doi.org/10.2139/ssrn.2565706

Manuel Frondel (Contact Author)

RWI Leibniz Institute for Economic Research ( email )

Hohenzollernstr. 1-3
45128 Essen
Germany

Ruhr University Bochum (RUB) ( email )

Universitätsstraße 150
Bochum, NRW 44780
Germany

Karoline Krätschell

Ruhr University of Bochum ( email )

Universitätsstraße 150
Bochum, NRW 44780
Germany

Lina Zwick

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany

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