IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2020i13p5309-d378782.html
   My bibliography  Save this article

The Relation between Environmental Management Systems and Environmental and Financial Performance in Emerging Economies

Author

Listed:
  • Cosmina L. Voinea

    (Faculty of Management, Open University of the Netherlands, 6419 AT Heerlen, The Netherlands)

  • Bas-Jan Hoogenberg

    (Faculty of Management, Open University of the Netherlands, 6419 AT Heerlen, The Netherlands)

  • Cosmin Fratostiteanu

    (Faculty of Management, Open University of the Netherlands, 6419 AT Heerlen, The Netherlands)

  • Hammad Bin Azam Hashmi

    (Faculty of Management, Open University of the Netherlands, 6419 AT Heerlen, The Netherlands)

Abstract

This study pursues to clarify the effect of environmental management systems (EMS) comprehensiveness on environmental performance and financial performance using an extensive quantitative dataset obtained in Brazil over an eight-year period. It is recognized that the implementation of environmental management differs per company varying in how many environmental practices are adopted and hence how comprehensive the EMS is. The relationship between EMS comprehensiveness, environmental performance, and financial performance proves to be complex. First of all, the overall negative effect of environmental performance on financial performance may indicate that the resources needed to realize an improved environmental performance do not outweigh the cost reductions resulting from eco-efficiency or improved reputation. The effect of EMS comprehensiveness on financial performance is in line with that, indicating that an above average EMS comprehensiveness results in lower financial performance, which may correspond to high environmental management- and overhead costs. Across sectors, the companies operating in sector industries have high quality EMS comprehensiveness, while the companies in agriculture, commerce, and services exhibit a lower EMS.

Suggested Citation

  • Cosmina L. Voinea & Bas-Jan Hoogenberg & Cosmin Fratostiteanu & Hammad Bin Azam Hashmi, 2020. "The Relation between Environmental Management Systems and Environmental and Financial Performance in Emerging Economies," Sustainability, MDPI, vol. 12(13), pages 1-21, July.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:13:p:5309-:d:378782
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/13/5309/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/12/13/5309/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Julia Hertin & Frans Berkhout & Marcus Wagner & Daniel Tyteca, 2008. "Are EMS environmentally effective? The link between environmental management systems and environmental performance in European companies," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 51(2), pages 259-283.
    2. Morrow, David & Rondinelli, Dennis, 2002. "Adopting Corporate Environmental Management Systems:: Motivations and Results of ISO 14001 and EMAS Certification," European Management Journal, Elsevier, vol. 20(2), pages 159-171, April.
    3. Patrícia Tourais & Nuno Videira, 2016. "Why, How and What do Organizations Achieve with the Implementation of Environmental Management Systems?—Lessons from a Comprehensive Review on the Eco-Management and Audit Scheme," Sustainability, MDPI, vol. 8(3), pages 1-25, March.
    4. Esty, Daniel C. & Porter, Michael E., 2005. "National environmental performance: an empirical analysis of policy results and determinants," Environment and Development Economics, Cambridge University Press, vol. 10(4), pages 381-389, August.
    5. Henri, Jean-François & Journeault, Marc, 2010. "Eco-control: The influence of management control systems on environmental and economic performance," Accounting, Organizations and Society, Elsevier, vol. 35(1), pages 63-80, January.
    6. Rondinelli, Dennis & Vastag, Gyula, 2000. "Panacea, common sense, or just a label?: The value of ISO 14001 environmental management systems," European Management Journal, Elsevier, vol. 18(5), pages 499-510, October.
    7. Fawad Rauf & Cosmina Lelia Voinea & Hammad Bin Azam Hashmi & Cosmin Fratostiteanu, 2020. "Moderating Effect of Political Embeddedness on the Relationship between Resources Base and Quality of CSR Disclosure in China," Sustainability, MDPI, vol. 12(8), pages 1-19, April.
    8. Anton, W.R.Q.Wilma Rose Q. & Deltas, George & Khanna, Madhu, 2004. "Incentives for environmental self-regulation and implications for environmental performance," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 632-654, July.
    9. Taiwen Feng & Dan Wang, 2016. "The Influence of Environmental Management Systems on Financial Performance: A Moderated-Mediation Analysis," Journal of Business Ethics, Springer, vol. 135(2), pages 265-278, May.
    10. C. Trumpp & J. Endrikat & C. Zopf & E. Guenther, 2015. "Definition, Conceptualization, and Measurement of Corporate Environmental Performance: A Critical Examination of a Multidimensional Construct," Journal of Business Ethics, Springer, vol. 126(2), pages 185-204, January.
    11. Petra Christmann & Glen Taylor, 2001. "Globalization and the Environment: Determinants of Firm Self-Regulation in China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(3), pages 439-458, September.
    12. Cosmina Lelia Voinea & Marcel Logger & Fawad Rauf & Nadine Roijakkers, 2019. "Drivers for Sustainable Business Models in Start-Ups: Multiple Case Studies," Sustainability, MDPI, vol. 11(24), pages 1-25, December.
    13. van Kranenburg, Hans & Voinea, Cosmina Lelia, 2017. "Nonmarket strategies predictors for foreign firms," Scandinavian Journal of Management, Elsevier, vol. 33(2), pages 82-92.
    14. Darnall, Nicole & Henriques, Irene & Sadorsky, Perry, 2008. "Do environmental management systems improve business performance in an international setting?," Journal of International Management, Elsevier, vol. 14(4), pages 364-376, December.
    15. Esty, Daniel C. & Porter, Michael E., 2005. "National environmental performance: an empirical analysis of policy results and determinants," Environment and Development Economics, Cambridge University Press, vol. 10(4), pages 391-434, August.
    16. Olivier Boiral, 2007. "Corporate Greening Through ISO 14001: A Rational Myth?," Organization Science, INFORMS, vol. 18(1), pages 127-146, February.
    17. Shuangyu Xie & Kohji Hayase, 2007. "Corporate environmental performance evaluation: a measurement model and a new concept," Business Strategy and the Environment, Wiley Blackwell, vol. 16(2), pages 148-168, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nursyazwani Mohd Fuzi & Sabrinah Adam & Mohamad Rohieszan Ramdan & Sharon Yong Yee Ong & Juliana Osman & Subramaniam Kolandan & Siti Zubaidah Mohd Ariffin & Nor Sa’adah Jamaluddin & Karmilah Abdullah, 2022. "Sustainability Management Accounting and Organizational Performance: The Mediating Role of Environmental Management System," Sustainability, MDPI, vol. 14(21), pages 1-17, November.
    2. Zhao‐Yong Sun & Meng‐Jie Li & Dongdong Li, 2023. "Carbon performance and corporate financial performance: The moderating role of consumer awareness of corporate social responsibility," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 663-670, January.
    3. Nader Alber & Amr Saleh, 2022. "Environmental Compliance Reactions to R & D Practices and Intellectual Capital: A Worldwide Evidence," International Business Research, Canadian Center of Science and Education, vol. 15(4), pages 103-103, April.
    4. Alla Kasych & Petr Suler & Zuzana Rowland, 2020. "Corporate Environmental Responsibility through the Prism of Strategic Management," Sustainability, MDPI, vol. 12(22), pages 1-29, November.
    5. Oksana Seroka‐Stolka & Kamil Fijorek, 2022. "Linking stakeholder pressure and corporate environmental competitiveness: The moderating effect of ISO 14001 adoption," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1663-1675, September.
    6. Petra C. M. Neessen & Cosmina L. Voinea & Els Dobber, 2021. "Business Models of Social Enterprises: Insight into Key Components and Value Creation," Sustainability, MDPI, vol. 13(22), pages 1-22, November.
    7. Agus Joko Pramono & Suwarno & Firdaus Amyar & Renny Friska, 2023. "Sustainability Management Accounting in Achieving Sustainable Development Goals: The Role of Performance Auditing in the Manufacturing Sector," Sustainability, MDPI, vol. 15(13), pages 1-13, June.
    8. Herman T. Wevers & Cosmina L. Voinea & Frank de Langen, 2020. "Social Entrepreneurship as a Form of Cross-Border Cooperation: Complementarity in EU Border Regions," Sustainability, MDPI, vol. 12(20), pages 1-23, October.
    9. Svetlana Ratner & Andrey Lychev & Aleksei Rozhnov & Igor Lobanov, 2021. "Efficiency Evaluation of Regional Environmental Management Systems in Russia Using Data Envelopment Analysis," Mathematics, MDPI, vol. 9(18), pages 1-21, September.
    10. Zhunxin Huang & Zengrui Xiao, 2023. "Dynamic Capabilities, Environmental Management Capabilities, Stakeholder Pressure and Eco-Innovation of Chinese Manufacturing Firms: A Moderated Mediation Model," Sustainability, MDPI, vol. 15(9), pages 1-22, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Luo, Le & Tang, Qingliang, 2016. "Determinants of the Quality of Corporate Carbon Management Systems: An International Study," The International Journal of Accounting, Elsevier, vol. 51(2), pages 275-305.
    2. Guoyou Qi & Saixing Zeng & Xiaodong Li & Chiming Tam, 2012. "Role of Internalization Process in Defining the Relationship between ISO 14001 Certification and Corporate Environmental Performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 19(3), pages 129-140, May.
    3. Shoaib Aslam & Mohamed H. Elmagrhi & Ramiz Ur Rehman & Collins G. Ntim, 2021. "Environmental management practices and financial performance using data envelopment analysis in Japan: The mediating role of environmental performance," Business Strategy and the Environment, Wiley Blackwell, vol. 30(4), pages 1655-1673, May.
    4. Pablo Arocena & Raquel Orcos & Fedaous Zouaghi, 2021. "The impact of ISO 14001 on firm environmental and economic performance: The moderating role of size and environmental awareness," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 955-967, February.
    5. Kyungmin Baek, 2018. "Sustainable development and pollutant outcomes: The case of ISO 14001 in Korea," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(5), pages 825-832, September.
    6. A.D. Nuwan Gunarathne & Ki‐Hoon Lee & Pubudu K. Hitigala Kaluarachchilage, 2021. "Institutional pressures, environmental management strategy, and organizational performance: The role of environmental management accounting," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 825-839, February.
    7. Gustavo Lannelongue & Oscar Gonzalez-Benito & Javier Gonzalez-Benito, 2014. "Environmental Motivations: The Pathway to Complete Environmental Management," Journal of Business Ethics, Springer, vol. 124(1), pages 135-147, September.
    8. Ionut Viorel Herghiligiu & Ioan-Bogdan Robu & Marius Pislaru & Adrian Vilcu & Anca Laura Asandului & Silvia Avasilcăi & Catalin Balan, 2019. "Sustainable Environmental Management System Integration and Business Performance: A Balance Assessment Approach Using Fuzzy Logic," Sustainability, MDPI, vol. 11(19), pages 1-30, September.
    9. Artitzar Erauskin‐Tolosa & Eugenio Zubeltzu‐Jaka & Iñaki Heras‐Saizarbitoria & Olivier Boiral, 2020. "ISO 14001, EMAS and environmental performance: A meta‐analysis," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1145-1159, March.
    10. Ying Zhang & Hongfei Ruan & Guiyao Tang & Li Tong, 2021. "Power of sustainable development: Does environmental management system certification affect a firm's access to finance?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3772-3788, December.
    11. Christin Seifert & Edeltraud Guenther, 2020. "Who cares?—Stakeholder relevance for voluntary environmental management in hospitals," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1786-1799, July.
    12. Christin Seifert & Matthias Damert & Edeltraud Guenther, 2020. "Environmental Management in German Hospitals—A Classification of Approaches," Sustainability, MDPI, vol. 12(11), pages 1-24, May.
    13. Demirel, Pelin & Kesidou, Effie, 2011. "Stimulating different types of eco-innovation in the UK: Government policies and firm motivations," Ecological Economics, Elsevier, vol. 70(8), pages 1546-1557, June.
    14. Frederick Kibon Changwony & Anthony Kwabena Kyiu, 2024. "Business strategies and corruption in small‐ and medium‐sized enterprises: The impact of business group affiliation, external auditing, and international standards certification," Business Strategy and the Environment, Wiley Blackwell, vol. 33(1), pages 95-121, January.
    15. MALEN, Joel & YAMANOI, Junichi, 2016. "Environmental regulation and international expansion of MNEs : The moderating role of pollution reduction resources and firm multinationality on location choice," IIR Working Paper 16-13, Institute of Innovation Research, Hitotsubashi University.
    16. Singh, Neelam & Jain, Suresh & Sharma, Prateek, 2015. "Motivations for implementing environmental management practices in Indian industries," Ecological Economics, Elsevier, vol. 109(C), pages 1-8.
    17. Claudia Poser & Edeltraud Guenther & Marc Orlitzky, 2012. "Shades of green: using computer-aided qualitative data analysis to explore different aspects of corporate environmental performance," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 22(4), pages 413-450, January.
    18. Elisabet Garrido & Consuelo González & Raquel Orcos, 2020. "ISO 14001 and CO2 emissions: An analysis of the contingent role of country features," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 698-710, February.
    19. Marie-France Waxin & Sandra L. Knuteson & Aaron Bartholomew, 2019. "Outcomes and Key Factors of Success for ISO 14001 Certification: Evidence from an Emerging Arab Gulf Country," Sustainability, MDPI, vol. 12(1), pages 1-17, December.
    20. Holtbrügge, Dirk & Dögl, Corinna, 2012. "How international is corporate environmental responsibility? A literature review," Journal of International Management, Elsevier, vol. 18(2), pages 180-195.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:12:y:2020:i:13:p:5309-:d:378782. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.