An Empirical Study of ISO 14001 Certification and Firm Environmental Performance

An Empirical Study of ISO 14001 Certification and Firm Environmental Performance

Yang Wang (Tianjin University, China), Yijun Chen (Tianjin University, China), Qi Xu (Tianjin University, China) and Wenqing Wu (Tianjin University, China)
DOI: 10.4018/978-1-7998-1966-0.ch001

Abstract

ISO14001 certification is of great significance to the company's environmental performance. Through the empirical analysis of environmental certification and performance of Listed Companies in China, this chapter draws some valuable conclusions. The initial ISO14001 certification will worsen the environmental performance of the enterprises. The equity nature of the enterprise has a moderating effect on the ISO14001 certification's influence on enterprise environmental performance. The separation rate of the above-mentioned two positions has a moderating effect on the ISO14001 certification's influence on enterprise environmental performance. Based on the above conclusions, this chapter puts forward some reasonable policy suggestions.
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Introduction

Currently, enterprises are in the transition period of China's new economy. Under the dual influence of international policies and public opinion, the requirements for the sustainable development and green performance of enterprises are increasing. Using a green development approach in accordance with such international policies will not only help enterprises avoid penalties from the environmental supervision department but also gain these enterprises a series of benefits. Therefore, Chinese enterprises have incorporated the certification of environmental standards such as ISO14001 into their strategies.

In 2017, the total number of global ISO14001 certifications was 319,496, and Asia accounted for 55.7% of these. China ranks first in the world in terms of the total number of ISO14001 certifications, accounting for 36% of the world’s total certification. From an industry analysis, it can be seen that ISO-certified companies are basically concentrated in industrial enterprises, and the number of construction industry certifications is at the top.

While the number of ISO14001 certifications by Chinese enterprises is very large, it is still necessary to carefully think about whether environmental performance is actually improved. Although countries in places such as Europe and the Americas have a smaller number of ISO14001 certifications, they have implemented a more stringent environmental standard, namely, EMAS. Compared with ISO14001, EMAS is more concerned with environmental performance, and there are more environmental factors involved. In addition, EMAS sets up specific environmental parameters, while ISO14001 only theoretically gives requirements for environmental standards management systems. To address such defects in ISO14001 (2004), the 2014 ISO/TC officially formulated the “Environmental Management System Requirements and Instructions For Use” as a revision of ISO14001. The new standard puts forward new ideas for strategic environmental management and formalizes the requirements for environmental performance into various provisions, such as 4.4 (Environmental Management System) and 9.1.1 (Monitor, Measurement, Analysis and Evaluation).

In recent years, many scholars have studied the influence of ISO14001 certification on a number of aspects of a company. For instance, Lu Jun and Jiao Shuyan (2011) studied the connection between the paper-making industry and the environmental information disclosure of the construction industry and the connection between environmental performance and financial performance. Yang Dongning and Zhou Changhui (2005) studied enterprises' driving force model for ISO14001 voluntary certification and discussed and analyzed interior driving forces such as the environment orientation of management and external driving forces such as coercive force. Miao Shuyi and other scholars (2014) mainly focused on the important role that ISO14001 certification plays for environmental supervision departments.

Key Terms in this Chapter

Environmental Performance: Enterprise environmental performance is the result of an enterprise's environmental management. This chapter quantifies the environmental performance with the amount of annual sewage charge.

Equity Nature: Equity nature is traditionally divided into state shares, state-owned legal person shares, social legal person shares, natural person shares. This chapter simplifies it into state holding and private holding.

Moderating Variable: The relationship between dependent variable and independent variable is a function of moderating variable and is affected by moderating variable.

Sewage Charge: According to the laws and regulations of a country, polluters should pay a certain amount of money to the state according to the type, quantity and concentration of pollutants they discharge.

Separation Rate of Two Positions: The difference between control and ownership. The calculation results are obtained according to the equity control chain.

Hausman Test: The Hausmann test can be used to normalize the OLS and WLS estimates to see if the difference exceeds the sampling error range.

ISO14001 Certification: ISO 14001 is the code name for environmental management system certification. The ISO 14000 series of standards is an environmental management system standard developed by the International Organization for Standardization. It addresses global environmental pollution and ecological damage, as well as major environmental problems such as ozone depletion, global warming and the loss of biodiversity.

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