Linking Environmental Management Systems to Firm Performance: Empirical Evidence from an Emerging Economy

Abstract

This study aims to determine how environmental performance and customer satisfaction affect the relationship between environmental management systems and company performance. For this purpose, we have collected and analyzed data from 243 textile companies in Pakistan, using partial least squares structural equation modelling. Our empirical results indicate that environmental management systems have a positive and significant impact on business success, customer satisfaction and environmental performance. The findings also show that environmental performance and customer satisfaction mediate the relationship between environmental management systems and business performance in a complementary manner. Our findings show that environmental performance and customer happiness are essential for textile companies to benefit from environmental management systems. The results suggest that Pakistani textile companies should make better use of environmental management systems as valuable tools for addressing stakeholders' concerns and for boosting financial profits.