The impact of ISO 14001 on firm environmental and economic performance: The moderating role of size and environmental awareness

This paper analyzes the impact of adopting the ISO 14001 standard on firm environmental and economic performance. In particular, it is argued that the degree of environmental awareness of the society (EAS) and firm size are two factors moderating the effect of ISO 14001 on firm performance. A number of hypotheses are formulated and empirically tested on an international sample of 583 listed companies in 46 countries over the period of 2009–2018. The findings show that (i) ISO 14001 adoption contributes to reducing firm carbon emission intensity and increasing firm profitability; (ii) the impact of ISO14001 on profitability is greater for companies from countries with high EAS and for larger firms; and (iii) the impact of ISO 14001 on carbon intensity is greater for headquartered in countries with low EAS. Managerial and policy implications resulting from the widespread adoption of certifiable environmental standards are also discussed.     

ISO 14001, EMAS and environmental performance: A meta‐analysis

The adoption of voluntary environmental certifications such as ISO 14001 and Eco‐Management and Audit Scheme (EMAS) has gained momentum in the last two decades. The scholarly literature has analyzed in depth the performance implications of the adoption of these certificates. Yet the findings are scattered and inconclusive. This article aims to shed light on this issue by meta‐analyzing the influence of the adoption of voluntary environmental certifications on corporate environmental performance, drawing on a sample of 53 scholarly studies analyzing a total of 182,926 companies. The findings show a positive influence of ISO 14001 and EMAS certifications on corporate environmental performance. A set of underlying moderating effects are also identified, such as a more pronounced positive effect for adoptions based on environmental innovation and for firms with a more mature certification. Implications for scholars, managers, and other stakeholders are discussed.     

Environmental Policies for Evaluating Suppliers' Performance Based on GRI Indicators

Many companies use a performance measurement system (PMS) to evaluate their suppliers' environmental performance (SEP). To do this a company can establish its own set of measures or adopt indicators borrowed from specific standards and guidelines such as the Global Reporting Initiative (GRI). However, the results of a literature review indicate that the weights of the different environmental performance indicators within an overall SEP rating are unclear. The aim of this paper is to understand what the environmental policies adopted by European manufacturing companies to evaluate their suppliers really are. In order to reach this objective, a quantitative model based on multiple linear regression has been developed. The model correlates different environmental aspects taken from the GRI set of indicators with the overall SEP rating. Interestingly, results show that performances on aspects such as transport and ISO 14001 certification do not count towards the final ranking, whereas compliance with laws and regulations is the cornerstone of the evaluation of the supplier. Other performance indicators can in some ways be linked to compliance with laws and regulations. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment     

Environmental reporting in Australia: current practices and issues for the future

This briefing addresses a number of current practices in environmental reporting in Australia. It is limited to consideration of mandatory and voluntary initiatives at the national level (rather than state or territory levels). Three initiatives are explored. Two of these are mandatory requirements—section 299 corporate disclosures required under the 2001 Corporations Act and section 516 disclosures by Commonwealth government organizations under the Environmental Protection and Biodiversity Conservation Act 1999. One other initiative is voluntary—Public Environmental Reporting—and is aimed at all organizations. Links with the Global Reporting Initiative are considered, followed by a brief comment on incentives and users of environmental reports. The briefing concludes by raising three issues that need to be addressed in the future—sustainable development; education, training and communication; and environmental accounting. Copyright © 2002 John Wiley & Sons, Ltd. and ERP Environment     

Environmental management certification and environmental performance: Greening or greenwashing?

This article analyzes the contribution of certifiable environmental management standards—such as ISO 14001 and the Eco‐Management and Audit Scheme (EMAS)—to corporate environmental performance. Based on a content analysis of 414 third‐party‐verified environmental statements from EMAS‐registered Spanish organizations, which included information for around 6,700 detailed indicators, a weak improvement in environmental performance was found. Less than half of the analyzed indicators—namely, 48.27%—revealed a net improvement. Similarly, analysis of the justifications of the registered companies for the lack of improvement points to a rather symbolical adoption of the certification, intended to do only the bare minimum. These findings call into question the prevailing opinion about the positive impact of voluntary certifiable environmental management standards on environmental greening. Implications for managers and public policy makers, as well as for other stakeholders, are discussed.     

从ISO14001到EMAS

ISO14001是目前应用最为广泛的环境管理体系标准,而EMAS是欧盟法令发布的自愿性环境管理工具。本文围绕环境绩效、环境评审、环境因素、信息公开、全面合规性、员工参与等方面,分析ISO14001和EMAS两种环境管理工具的相关性和主要差异,为组织从ISO14001升级至EMAS提供参考。     

Corporate climate-related voluntary disclosures: Does potential greenwash exist among Australian high emitters reports?

This study examines the issue of greenwashing among corporate high emitters subject to government scrutiny. To do so, we investigate the relationship between the actual environmental performance, measured as carbon emissions, of companies subject to the Australian National Greenhouse Energy Reporting Act 2007 (NGER) and their climate-related voluntary disclosures. To measure climate-related disclosure, we construct a climate-related disclosure index based on four prominent frameworks and score corporate report content against that Index. Using a sample of 150 companies with NGER emissions data for Years 2016 and 2017, a period that precedes the issuance of recommendations for disclosure by the Task Force on Climate-Related Financial Disclosure (TCFD), our regression results show a disappointingly low level of climate-related disclosure by most companies. We also find a negative relationship between climate-related disclosure and 1-year lagged environmental performance among companies exhibiting a year-on-year rise in carbon emissions. That is, our findings provide evidence of potential greenwashing by poor environmental performers, presumably to change negative perceptions by stakeholders, as predicted by socio-political theories. In contrast, we find no evidence of greenwashing among companies experiencing a year-on-year decrease in emissions.     

Driving sectoral sustainability via the diffusion of organizational eco‐innovations

Using insights from institutional literature, the resource‐based theory of the firm, and internationalization, we explain variations in the diffusion of organizational eco‐innovations. Studies have previously reported that the drivers of eco‐innovation are regulatory pressures, technology push, market pull, and firm factors. But relatively little attention has been paid to nontechnological forms of eco‐innovation, such as environmental management systems (EMS). Consequently, how exactly to encourage EMS adoption across sectors is still unclear. We attempt to address this question by combining sectoral panel data (2009–2014) from a number of sources in Spain. The econometric analysis reveals that environmental policy is driving the adoption of ISO 14001 largely due to differences across sectors in energy and pollution intensity. In addition, the adoption of ISO 9001 increases the use of ISO 14001 in industry because of complementarities between the two systems. Third, in highly internationalized sectors, firms adopt a greater amount of ISO 14001.     

Do institutional investors drive corporate transparency regarding business contribution to the sustainable development goals?

Institutional investors show increasing interest in how companies align their corporate social responsibility strategies with the sustainable development goals (SDGs) proposed by the United Nations (UN). The information disclosed in this regard is essential to know and monitor business contribution to the 2030 Agenda. In this paper, we analyze the influence that institutional investors have on the adoption of the disclosure strategy established by UN and the Global Reporting Initiative (GRI)—GRI‐SDG Compass. The results obtained for a sample of 989 international companies, which prepare their sustainability reports following the GRI guidelines, show that ownership by foreign investors, pension funds, and “other” investors boosts the relevance of the information disclosed in relation to the 2030 Agenda. On the contrary, government, financial institutions, and cross holdings have no impact on the information systems developed.     

Why do standardized ISO 14001 environmental management systems lead to heterogeneous environmental outcomes?

Institutional theories and resource‐based views have suggested that, although they appear similar externally, standardized management systems may be implemented very differently in different organizations. This variability in implementation may be responsible for the heterogeneous performance of these standardized management systems. The current literature on the environmental impacts of ISO 14001 certification has largely neglected this phenomenon. Drawing on our survey of all US 14001 certificate holders, this study finds that great variability does exist in facilities' implementation of ISO 14001 standards. This heterogeneity has a significant impact on the linkage between ISO 14001 certification and facilities' environmental performance. In particular, we find that facilities that integrate ISO 14001 standards into their daily operations are more likely to report improvements in environmental performance. Environmental improvements are also more likely to occur in facilities that include performance management elements in their ISO 14001 standards. Furthermore, both types of facility are more likely to report that ISO certification contributes to this improvement. Neglecting the heterogeneity in facilities' implementation of ISO 14001 standards may explain the instability of findings from the empirical literature investigating the impacts of ISO 14001 certification. Theoretically, this paper informs the understanding of heterogeneous organizational behavior under isomorphic pressures. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Representative account or greenwashing? Voluntary sustainability reports in Australia's mining/metals and financial services industries

Why are more and more companies voluntarily issuing costly, potentially exposing standalone sustainability reports on environmentally and socially problematic issues? Using legitimacy theory, this study analyses ways companies seek to strategically enhance legitimacy by leaning towards either ‘representative’ reporting of both favourable and unfavourable information especially in an industry's highest impact domains, or ‘greenwashing’ (including whitewashing non-environmental issues), which downplays unfavourables and high-impact domains and highlights favourable but less relevant points. Content analysis compared Global Reporting Initiatives (GRI) reports from 2011 to 2019 by Australian financial services companies (107 reports) and mining and metals companies (122). Specifically, to critique reporting quality in fine grain, it disaggregated results into levels (from omission to full quantitative treatment) of disclosure of good/bad/neutral news indicators and violation-related/non-violation-related ones and identified highest impact domains. Neither industry's reporting was very representative. Relatively though, mining and metals leant towards representation: fuller disclosure on environmental aspects (its highest impact domain), including unfavourables: bad and violation-related indicators. Financial services companies only led in disclosing neutral social indicators, not bad or violation-related ones, so leant towards greenwashing. Results also suggest that after the GRI clarifying materiality principle in 2016, financial services disclosure quality dropped further by de-emphasising environmental without lifting social disclosures, while mining and metals' stayed unchanged. The results confirm and better specify widely indicated reporting weaknesses, contributing to content analysis methodology and legitimacy theory. This arms guideline setters, investors and other stakeholders to better evaluate/design reports and might encourage firms to voluntarily improve disclosures.     

Seeing the Need for ISO 14001

ABSTRACT    Many firms worldwide have adopted environmental management systems, and some have taken the extra step and had their systems certified for the international standard ISO 14001. While institutional pressures and market demand often motivate firms to adopt an EMS, the reasons why they certify for ISO 14001 are less clear. In this study, we interviewed members of the Canadian pulp and paper industry who had either an EMS or ISO 14001 certification to understand why they may have become ISO 14001 certified. We found that task visibility and environmental impact opacity lead to differences in a firm's approach to ISO 14001 certification in the absence of coercive pressures.     

Using ISO 14001 to promote a sustainable supply chain strategy

Formally adopted in 1996 by the International Organization of Standardization, ISO 14001 represents a voluntary international environmental standard, which will likely be adopted by a vast majority of corporations. Its major focus is on the structure, implementation and maintenance of a formal environmental management system. Despite its international acceptance, ISO 14001 is surrounded by controversy and criticism. The literature is clearly divided in its assessment of ISO 14001, which is viewed as a variant of total quality environmental management or a paper‐driven process of limited value. In this study, case‐based research is used to address the competing views of the standard to show that ISO 14001 registration can be leveraged across the supply chain into a competitive advantage. By looking at ISO 14001 registered firms, we compare different amounts of integration and sustainability in the supply chain. We then posit several research propositions to provide an empirical framework for the impacts of ISO 14001 on supply chain design and how it will evolve in the future. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.     

Factors influencing the quality of corporate environmental disclosure

Many firms choose to communicate their environmental strategies through voluntary environmental disclosures. This paper examines patterns in the quality of voluntary environmental disclosures made by a sample of around 450 large UK companies drawn from a diverse range of industrial sectors. The analysis distinguishes between five facets of quality, including the disclosure of group‐wide environmental policies, environmental impact targets and an environmental audit. We examine how the decisions firms face regarding each facet of quality are determined by firm and industry characteristics, and find the quality of disclosure to be determined by a firm's size and the nature of its business activities. Specifically, we find high quality disclosure to be primarily associated with larger firms and those in sectors most closely related to environmental concerns. In contrast to several recent contributions, we find that the media exposure of companies plays no role in stimulating voluntary disclosures. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Factors for succeeding in ISO 14001 implementation in Italian construction industry

The main aim of this research is to find the most relevant factors for a successful ISO 14001 implementation in the construction industry. Thousands of companies, including those in the construction industry, are interested in an ISO 14001 environmental management system (EMS). Italy holds one of the largest databases of ISO 14001 certified organisations; in this database, the construction industry represents the second largest sector. Using a questionnaire, the research tested six potential factors that affect the success of an ISO 14001 EMS implementation. Moreover, the quantitative results were discussed together with qualitative notes left by respondents. The results showed that only three out of the six factors really affect ISO 14001 EMS implementation in the construction industry: involvement of employees, top management commitment, and development of environmental technical skills. It seems that the respondents perceived that economic and financial results, identification of environmental aspects and impacts, and the involvement of stakeholders have a limited or null effect on ISO 14001 implementation. Particular issues concerning developing workers' awareness, evaluating all the environmental impacts, and obtaining real economic advantages were raised in the respondents' comments. Conclusions highlight specific contributions for practitioners and other stakeholders involved in EMS.     

Environmental self-regulation for sustainable development: Can internal carbon pricing enhance financial performance?

Internal carbon pricing is an innovative self-regulation mechanism where companies set their own carbon prices on business operations to mitigate climate risk and achieve sustainable development. While internal carbon pricing has gained popularity among multinational enterprises, its firm-level impact is underexplored. This research provides novel theoretical and empirical evidence on how the internal carbon price as a cost component can contribute to profitability growth. We construct a panel dataset of 132 multinational enterprises across Europe, North America, and Asia by tracking their use of internal carbon pricing from 2013 to 2017 based on their records at the Carbon Disclosure Project. To address endogeneity bias, we employ propensity score matching method on a fixed-effects model. Results indicate that using internal carbon pricing can increase return on assets by 1.1%. Firms with internal carbon prices are more likely to reduce cost of goods sold to improve return on assets. Our study suggests that internal carbon pricing as environmental self-regulation can generate profitability gains through cost reduction. The research also points out the potential of voluntary internal carbon pricing to complement command-and-control carbon pricing regulations.     

Estimating the impact on efficiency of the adoption of a voluntary environmental standard: an empirical study of the global copper mining industry

This paper uses data on the world’s copper mining industry to measure the impact on efficiency of the adoption of the ISO 14001 environmental standard. Anecdotal and case study literature suggests that firms are motivated to adopt this standard so as to achieve greater efficiency through changes in operating procedures and processes. Using plant level panel data from 1992 to 2007 on most of the world’s industrial copper mines, the study uses stochastic frontier methods to investigate the effects of ISO adoption. The variety of models used in this study find that adoption either tends to improve efficiency or has no impact on efficiency, but no evidence is found that ISO adoption decreases efficiency.     

Explaining the impact of ISO 14001 on emission performance: a dynamic capabilities perspective on process and learning

I draw upon the dynamic capability model to explore how new process standards influence the ability of manufacturing facilities to improve environmental performance by reducing toxic emissions. The process standards studied are the ISO 14001 environmental management standards, in use since 1996. Hypotheses are developed to account for how early adoption of ISO 14001 and experience with the standards influence emission levels. These hypotheses are tested using a large sample of electronics manufacturing facilities and data from 1996 through 2001. Consistent with theoretical expectations, analyses show that being one of the first facilities to adopt ISO 14001 was associated with lower emissions. Further, a separate effect is due to experience: the longer a facility operated under ISO 14001, the lower its emissions. The paper discusses the implications of these results for theory and policy development. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.     

Voluntary adoption of ISO 14001 in Japan: mechanisms,stages and effects

This paper seeks to understand what factors contribute to voluntary adoption of the ISO 14001 environmental management system by private sector facilities in Japan. A model based on regulatory, competitiveness, social responsibility and organization theory is applied to 1999 survey data. Analysis shows systematically different factors to be important indicators of voluntarism in different industries and for facilities at different stages of certification. First adopters and second adopters appear to be fundamentally different types of organizations driven by different internal and external factors. Although results do not indicate a clear causal linkage between ISO adoption and greening activity, evidence shows that at least two different stages of adoption have taken place in Japan and that ISO adoption is associated with environmental action. Copyright © 2002 John Wiley & Sons, Ltd. and ERP Environment     

Factors Influencing Corporate Environmental Disclosure

In this paper, we have studied the factors that influence the environmental disclosures of Italian listed companies. We also aimed to verify the effects produced by the introduction of specific legislation (albeit of a voluntary nature) on environmental disclosures. The analysis has the advantage of including all of the informational documents produced by the company. The analysis shows an (excessively) low level of disclosure of environmental information by the companies examined. The econometric analysis then shows, contrary to our hypothesis and the results of previous analyses carried out in other countries, a negative and statistically significant relationship between environmental disclosures, the presences of minority shareholders and large auditors and the listing of the company, including in foreign markets. We lastly observed that the introduction of ad hoc legislation as purely voluntary only affects the contents of quantitative environmental disclosures, which are unsuitable for a highly industrialized developed country. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment