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ISO 14001 Implementation in Organisations

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ISO 14001 standards on environmental management provide a system for tracking, managing and improving performance concerning the environmental. The implementation of ISO 14001 has contributed to environmental sustainability and not an expenditure, but also a source of business growth toward company (Bayramoglu et al., 2012) .

Observation occurs that ISO 14001 certification in relation to firm’s performance, which improved financial performance for certified firms over non‐certified ones (Cassells, Lewis and Findlater, 2012). ISO 14001 helps in boosting the company performance brings more competitive advantages toward the company (Giménez Leal, Fa and Pasola, 2003; González-Benito and González-Benito, 2005). The description is agreed by Baregheh, Rowley and Sambrook (2009) which stated that competitive advantages could be gained with innovation in firm. Then, implementation of ISO 14001 makes firms saving cost through reduce in the use of raw materials, with the efficient managing of raw materials (Ambec et al., 2013). However, in two studies of Bellesi, Lehrer and Tal (2005) and Cañón-de-Francia and Garcés-Ayerbe (2009) ,both found a negative related to financial impact which including, rate of return (ROR), return on assets (ROA), and stock return respectively.

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Other than that, empirical studied by Biondi et al.(2000) found out that ISO 14001 implementation in organisation will contributes to organizational and managerial efficiency, successive maintaining of compliance in order to enhancement of enterprise’s image. (Sambasivan and Fei (2008) also have the same point of view illustrated that reputation and image of company able to improve due to customer loyalty and trust with the implementation of ISO 14001. Nevertheless, in their study of Australasian organisation Zutshi and Sohal (2004) argued that the ISO 14001 implementation was time and cost consuming for documentation preparation and training of employees, the start-up cost and fees associated with external auditors and consultants are also consider vast (Cassells, Lewis and Findlater, 2012).

Organization can consider various aspects when conducting their environmental performance. In this sense, different factors can serve as indicators of environmental benefits, such as increased share of recycled materials, reductions of energy consumption, solid wastes emissions to water and air (Radonjič and Tominc, 2006). According to the studies by Gregor et al. (2006), firms reduced energy consumption in their processes in Slovenia after implementation of ISO 14001. More internationalized studies from Nicole and Hajime (2015) have also shown a positive relationship between ISO 14001 certification and improved environmental performance for manufacturing facilities in Canada, France, Germany, Hungary, Japan, Norway, and the U.S. (Johnstone et al. 2007). However, other studies of facilities operating in Mexico (Blackman 2012), the United Kingdom (Dahlstrom et al. 2003), and the U.S. (King et al. 2005) demonstrate no change in environmental performance (Darnall and Katayama, 2015).


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