Assessing the Performance of Voluntary Environmental Programs: Does Certification Matter?

Abstract

The promotion of voluntary environmental programs (VEPs) as alternative approaches to traditional environmental regulation has fueled numerous researchers to evaluate VEP performance. However, these studies have focused on assessing the environmental performance of a single VEP. As yet, we know little about the overall environmental benefits of these programs. Moreover, questions remain about whether VEPs designed with different monitoring regimes - related to whether programs are self-monitored or undergo external certification - vary in their ability to improve environmental conditions. Using meta-analysis methodology, this paper evaluates the aggregated environmental outcomes of US VEPs drawing on data from 9 studies and over 30,000 firms. We show that collectively VEP participants do not improve their environmental performance over non-participants. Rather, non-participants improve their environmental performance by 7.7% more than VEP participants. Additionally, non-participants improve the environment 24% more than participants in self-monitored VEPs, whereas participants in ISO 14001 as a group exhibit inconclusive environmental performance improvements.

Keywords: voluntary environmental programs, certification, self-monitoring, environmental performance, meta-analysis, ISO 14001

JEL Classification: L21, L60, M10, M14, Q20, Q30