The Impact of Environmental Management on Labour Productivity

Abstract

The green transition and green economic growth are policy priorities in the European Union. In this context, this study estimates the effects of environmental management on firm performance, in particular labour productivity. There is currently a lack of empirical evidence on this topic, although it is of great importance due to the increasing need for environmental practices across the globe. Therefore, to address this gap, we explore the relationship between several environmental variables on labour productivity, through the use of cross-sectional firm-level data. These data were obtained using the sixth wave of the Business Environment and Enterprise Survey (BEEPS VI). This study focuses on ten EU countries. The results obtained from the empirical analysis reveal that firms who employ an environmental manager and firms that are subject to energy taxes or levies both have higher productivity than those who do not; thus, firms that have employed or are subject to certain environmental practices reap the benefits of higher labour productivity. Furthermore, firms that use renewable energy have higher labour productivity than those that do not. Therefore, the results obtained allowed us to draw implications for both policy makers and managers.