Quality management, environmental management and firm performance: a review of empirical studies and issues of integration

June
2009
© 2008 The Authors
209
Journal compilation © 2008 Blackwell Publishing Ltd and British Academy of Management
Table 4. Summary of EM-firm performance link results
Study
EM variables
EP variables
FP variables
Major findings
Hamilton (1995)
TRI (Toxic Release Inventory) emissions
Returns (stock price reaction) Significant negative returns on the day TRI emissions data were first announced.
Cohen et al. (1995)
TRI emissions, oil spills, chemical spills, environmental litigation cases
ROA, ROE, total return to common shareholders
(Compustat)
The group of low-polluting firms had better economic performances not always at a significant level).
Hart and
Ahuja (Emission reductions based on
TRI from the IRRC Corporate Environmental Profile data
ROA, ROE, return on sales (ROS)
Pollution prevention activities have a positive influence on FP within
1–2 years. ROE takes longer to be affected.
Klassen and McLaughlin (Environmental awards in the NEXIS database chemical/oil spills, gas leaks or explosions
Stock market returns NYSE, AMEX, CRSP)
Environmental awards (crises) led to significant, positive (negative) changes in market valuation.
Russo and
Fouts (Environmental ratings (FRDC): compliance, expenditures, waste reduction
ROA
Positive and significant impact of environmental performance on ROA.
Cordeiro and
Sarkis (1997)
TRI releases that are recovered, treated or recycled on-site
Industry analyst earnings- per-share growth forecasts
High environmental performance is significantly negative in relation to earnings-per-share growth forecasts.
Judge and Douglas (Integration of environmental issues into the strategic planning process (perceptual measures)
Environmental performance perceptual measures)
ROI, earnings growth, sales growth, market share change (perceptual measures)
Positive and significant impact of environmental issue integration on FP.
Sharma and
Vredenburg (Proactive environmental strategy (perceptual measures)
Organizational benefits perceptual measures)
Positive and significant influence of proactive practices on organizational capabilities and of the latter on organizational benefits.
Edwards (Environmental policy, environmental management system (EMS, impacts monitoring, supplier auditing
Greenhouse gas/ozone depleting substances emissions
Return on capital employed (ROCE), ROE
In several comparisons, environmentally high-performing firms perform better (not always at a significant level).
Álvarez et al. (Environmental strategy perceptual measures)
Occupation, profits perceptual measures)
Groups with a more consolidated proactive environmental strategy have higher occupancy levels significant) and higher profits not significant).

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