Do voluntary environmental management systems improve environmental performance? Evidence from waste management by Kenyan firms

Abstract

We examine whether the adoption of global voluntary environmental management systems - United Nations Global Compact and ISO 14001 - lead to more effective environmental performance. Previous studies have presented inconclusive findings of voluntary environmental management systems on environmental performances. Possible reasons for conflicting results are the influence of observable and unobservable factors that affect environmental performance as well as the use of different measures of environmental performance indicators. Using primary data from Kenyan firms in 2019, waste management defined by wastewater recycling, solid waste reusing and use of environmentally safe disposal methods, we determine the effects of voluntary environmental management systems (VEMS) on firm-level environmental performance. We conclude that the adoption of VEMS are associated with significant improvement in environmental performance in developing economies. Our conclusions provide insights to corporate management and policy makers in developing countries on decisions regarding better environmental management. VEMS forms an environmental management tool suitable in confronting wastewater and physical refuse challenges as well as conducive waste disposal methods.