Impact of environmental management system implementation on financial performance

Kevin Watson (Department of Management, College of Business Administration, University of New Orleans, New Orleans, Louisiana, USA)
Beate Klingenberg (School of Management, Marist College, Poughkeepsie, New York, USA)
Tony Polito (Department of Decision Sciences, College of Business, East Carolina University, Greenville, North Carolina, USA)
Tom G. Geurts (School of Management, Marist College, Poughkeepsie, New York, USA)

Management of Environmental Quality

ISSN: 1477-7835

Publication date: 1 December 2004


Environmental management systems (EMS) seek to make companies simultaneously more competitive and environmentally responsible. Improved environmental performance can be sought from the adaptation of techniques that emphasize reduction of waste and process/product redesign in the quest of reducing environmental impact. However, EMS lacks a framework to quantify improvements and much of the evidence of EMS's impact on financial performance is anecdotal. This lack of theoretical development has served to diminish corporate support, thus reducing the likelihood of EMS implementation due to a perceived cost disadvantage. This paper proposes, and tests, a framework to quantify EMS improvements to determine the impact of EMS strategies on financial performance. Our findings suggest that implementation of an EMS strategy does not negatively impact a firm's financial performance.



Watson, K., Klingenberg, B., Polito, T. and Geurts, T. (2004), "Impact of environmental management system implementation on financial performance", Management of Environmental Quality, Vol. 15 No. 6, pp. 622-628.

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