A study on the impact of environmental management system (EMS) certification towards firms' performance in Malaysia

Abstract

PurposeTo investigate the impact of EMS certification on the performance of firms, including economic and environmental aspects and perceived customer satisfaction.Design/methodology/approachThe purpose of this study is hypotheses testing in order to explain the variance in the dependent variable (firms' performance in terms of economic and environmental aspects) by establishing the nature of the relationship between the dependent variable and the independent variables through the testing of the hypotheses.FindingsThe results reveal that certification impacts positively on both the environmental and economic performance of enterprises. Respondents perceived “enhanced corporate image” to be the strongest impact of certification, and they believe that the benefits obtained from EMS certification far outweigh the cost of its implementation.Research limitations/implicationsThe study only surveyed ISO 14001‐certified firms. Future research should include non‐certified firms.Practical implicationsTo improve the quality of the environment there needs to be a partnership between government, businesses and the community.Originality/valueISO 14001 certification has a positive impact on firms' performance, specifically on perceived economic impact, perceived environmental impact and perceived customer satisfaction. By failing to perceive a marketing opportunity from using this well‐known standard, firms can lose market share.