Environmental Policy Performances for Sustainable Development: From the Perspective of ISO 14001 Certification

Abstract

This study investigated the financial performances of environmental policy by using the long-term effect of ISO 14001 certification. Drawing on a natural-resource-based view of the firm, this study examined abnormal performances of ISO 14001 certified firms on the New York Stock Exchange (NYSE) and National Association of Securities Dealers Automated Quotations (NASDAQ) in the USA during the period 1996-2010 employing a rigorous event study methodology. The results indicate that the profitability variables showed immediate positive abnormal effects after firms applied for the ISO 14001 certification, while the market benefit variable showed gradual improvements after obtaining the certification. However, ISO 14001 did not show significant effect on the internal process improvement. Overall, ISO 14001 was found beneficial to the firm in the long run from the perspectives of profitability and market benefits.

Dynamic Capability of the Firm as Driver of Green Supply Chain Management Implementation

“…The impact of eco-friendly management on competitive advantage has been studied in various ways [6,27,28]. Previous studies focused on how to monitor its partners to participate in environmental regulations compliance for reducing and minimizing harmful outcomes [29].…”

“…Studies have argued that success in addressing environmental issues may enable firms to reduce risk and in turn increase innovation and profitability [82,84]. Also, public announcements about the firm's green management practices positively affect its image and economic performance [28,86]. Studies have argued GSCM provide firms with better profit margin through establishing new standards [87].…”

Sustainable development and pollutant outcomes: The case of ISO 14001 in Korea

“…Most outcome studies on EMS-based standards have paid heavy attention to whether their implementation actually impacts on pollutant emissions (Potoski & Prakash, 2005a;Russo, 2009;Yin & Schmeidler, 2009), legal compliance (Potoski & Prakash, 2005b;Short & Toffel, 2010), and economic performance (Lee, Noh, Choi, & Rha, 2017;Moon, Bae, & Jeong, 2014;Porter & Van der Linde, 1995;Teng & Wu, 2017). Of these various outcomes, the present study focuses on the impact of ISO 14001 on the level of pollutant emissions.…”

Impact of environmental policy on firm's market performance: The case of ISO 14001

“…Business organizations' concerns are increasingly focused on various sustainable strategies to attain social content, to legitimate them in the judgment of society in general and shareholders in particular (Faisal, Andiningtyas, Achmad, Haryanto, & Meiranto, 2018;Welford, 2016). Environmental Management System (EMS) is argued to be one of these business strategies that has been widely used globally (Bansal & Hunter, 2003;Lee, Noh, Choi, & Rha, 2017). ISO 14001certification has been known as an environmental business strategy, which can not only improve environmental performance (Potoski & Prakash, 2005;Rondinelli & Vastag, 2000;Russo, 2009) but also promote a sustainable supply chain strategy (Curkovic & Sroufe, 2011) and enhance firm's profitability (Darnall & Edwards, 2006;Delmas, 2009).…”