Do environmental management systems help improve corporate sustainable development? Evidence from manufacturing companies in Pakistan

Abstract

This study assessed whether the adoption of an environmental management system (EMS) as a part of an integrated management system (IMS) helps improve corporate sustainability based on the data for 211 manufacturing companies in Pakistan. A stakeholder-weighted CSR index and an equal-weighted CSR index were used to measure CSR performance of the selected companies. Descriptive t-test and exploratory factor analysis were employed to test the hypothesis and internal consistency. Structural equation modelling was used to measure various useful links between latent and observed variables. Results revealed that the mean CSR performance of EMS adopters was significantly higher than that of non-EMS adopters. Further, EMS adopters had positive and significant effect on soundness, environmental protection, fairness and contribution to society, whereas, the non-EMS companies had positive and substantial impact on employee satisfaction and economic contribution. In conclusion, EMS adoption can be an effective tool for organisations to address economic, social and environmental issues. Moreover, EMS adoption appears to be a viable means to develop business goals and improve CSR activities.