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

C.L. Voinea*, B. (Bas-Jan) Hoogenberg, Cosmin Fratostiteanu, Hammad Bin Azam Hashmi

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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.
Original languageEnglish
Article number5309
Number of pages21
JournalSustainability
Volume12
Issue number13
DOIs
Publication statusPublished - 1 Jul 2020

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