ISO 14001 Environmental Management Systems Certification, Firm Characteristics and Performance of Certified Firms in Nairobi County, Kenya

Abstract

Rising environmental concerns and stakeholder demands for demonstration of environmental responsibility by firms has culminated in widespread adoption of Environmental Management Systems (EMSs), with the framework based on the ISO 14001 standard being the most popular. One question that has dominated research is how ISO 14001 EMS certification contributes to firm performance. Studies on this question have largely focused on countries outside the African continent and yielded conflicting findings. Consequently, this study investigated the relationship between ISO 14001 EMS Certification and performance of certified firms in Nairobi County, Kenya. Two main research hypotheses were tested. The study applied descriptive, cross sectional research design in a census of 36 firms in Nairobi County, Kenya. Primary data was collected via structured questionnaires and analyzed using descriptive and inferential statistics. The descriptive data indicated general agreement among respondents that implementation of the core ISO 14001 elements in their respective firms satisfied the requirements specified on the questionnaire to a great extent, and that the factors for effective implementation of ISO 14001 were in place in their firms. Firm Performance improvement from ISO 14001 was rated in the range of 10-15%, though with variation in the ratings obtained. Environmental Policy, Planning, and Implementation and Operation have a positive relationship with Firm Performance, although this is not statistically significant for the element of Planning. Checking and Corrective Action and Management Review in turn have a significant, negative relationship with Firm Performance. The moderated regression analysis showed evidence of positive moderation by Firm Characteristics for Environmental Policy, Checking and Corrective Action, and Management Review, but not for Planning and Implementation and Operation; while the strength of the relationship improved by 8.4%. The study recommends that firms be cognisant of the moderating factors affecting successful implementation of EMSs in their respective industry set ups, and critically assess how these can be addressed at firm level, in order to enhance their ability to benefit from adopting EMSs.