Financial impact of certified ISO 14001 Environment Management Systems in UK and Ireland

Abstract

An Environmental Management System certified to ISO 14001 simultaneously helps an organisation demonstrate commitment to improving environmental performance and contributes to better financial performance. This research compares the financial performance (return on sales) of organisations certified to ISO 14001 with organisations that were not certified over two timeperiods: five years – one year immediately preceding certification, through the year of certification and three years following certification; and three years – one year immediately preceding certification to the year immediately following certification.
Analysis of randomly selected paired organisations revealed a statistically significant relationship between financial performance and the certification event. The cumulative increase in Return on Sales for five years was approximately four percentage-points. A model of cumulative Return on Investment suggested an incremental profit of approximately four million pounds over five years for a company with a turnover of approximately one hundred and twenty million pounds.