| This study employed a quasi-experimental design to compare the experimental group (ISO companies) with the matched control group (non-ISO companies) on the effect of ISO-14001 registration (independent variable) on financial performance (three dependent variables): return on revenue (ROR), return on assets (ROA), and operating revenue (OPR).;This study also examined the effects of early adoption, length of registration, and size of companies on the relationship between ISO registration and financial performance.;The distribution of data on ISO registration indicated that industries with higher level of resources consumption, or industries with higher levels of pollution (i.e., auto industry 8.88%, chemical industry 8.41%, machinery industry 7.01%, and semiconductors industry 6.54%) were more likely to register for ISO-14001.;The experimental group (ISO companies) consisted of the 81 companies from the S&P large cap, mid cap, and small cap indices, which had at least one ISO certificate and for whom at least five years of financial data were available.;This study employed analysis of covariance (ANCOVA) as the main tool for statistical analysis. Baseline financial data of two years before registration (T - 2) was used to adjust change scores between T - 2 and T + 2. In addition, because of the violation of equal slope on OPR (for T +/- 2: F=2.2477, F*=1.9751), multiple analyses of variance (MANOVA) and analysis of variance (ANOVA) were also used.;Statistical analyses indicated that registration of ISO-14001 EMS led to lower ROR (p=0.012, N=162, alpha=0.05); lower ROA (p=0.041, N=162, alpha=0.05), and no change in OPR (p=0.3689, N=162, alpha=0.05). Early adoption, length of ISO registration, and size of company did not affect the relationship of ISO registration and financial performance.;It appears that implementation of ISO-14001 introduced expenses and inefficiency during the period studied. Further research is suggested for more in depth investigation on the quality of implementation of ISO-14001 EMS, rather than a simple test of the adoption. A model is presented proposing that when EMS is supported by environmental awareness, it will be integrated in business management in a way that can have triple-bottom-line impacts. |
