Environmental Economics

Evaluating the ISO 14001 Environmental Management Standard and PCS Data for Environmental Management Research: Theory and Data

This report has two parts. The first part provides a conceptual and empirical analysis of the functioning of the ISO 14001 Environmental Management Standard. ISO 14001 codifies a set of best environmental management practices, and offers third party certification to firms that comply with these practices. The standard has enjoyed widespread diffusion: By the end of 2006, approximately 130,000 firms worldwide were ISO 14001 certified.

Some practitioners and scholars view certification with ISO 14001 as a means that helps firms overcome information asymmetries in the market for corporate environmental performance. Others focus on the standard’s codification element and view ISO 14001 as a toolbox that assists firms in improving their environmental performance. The conceptual analysis in this project suggests that while certification and codification may allow ISO 14001 to guide firm behaviors in areas where other instruments of soft law fail, they also reduce the standard’s effectiveness in shaping firm behaviors by attracting an inconsistent mix of participants that will weaken decentralized enforcement processes.

The empirical analysis in the project explores how multi-unit firms employ certification with ISO 14001. Using a large seven year panel dataset of U.S. manufacturing firms, it finds that multi unit firms use certification strategically in that they seemingly satisfy stakeholder pressures by adopting ISO 14001 so as to improve their environmental performance, but that certification actually occurs at firm plants that already have better, rather than poor, environmental performance.

The second part of this report provides a description of Permit Compliance System (PCS) data. Compared to other data held at the EPA, most notably data from the Toxic Release Inventory (TRI), PCS data has rarely been used in environmental management research. While the data description in this report should facilitate future use, an evaluation of the data also reveals that PCS data has a number of important problems that make it at least partially inferior to TRI data. The appendix of this report contains explanations for many of the PCS data fields that lack needed descriptions.

  • Keywords

    6. Pollution Control Industry Surveys and Assessments
    8. Other Analyses and Reports
    Environmental Media:
    f. Multimedia
    Terlaak, Ann
    EPA Project Officer/ Manager:
    Carlin, Alan
    Geographic Area:
    Study Purpose:
    Empirical Application, Data Development, Policy Evaluation
    Inventory Record #: EE-0518
  • Participating Organizations

    Research Organization:

    Wisconsin at Madison, University ofAddress:
    City: Madison State: WI53706 ZIP:
    Phone: Fax:
    Funding Organization:
    Environmental Protection Agency, Office of Policy, Economics, and Innovation, National Center for Environmental EconomicsAddress:
    City: State: ZIP:
    Phone: Fax:
  • Report Details
    Number of Pages:
    Comment: This report was originally funded by the EPA Office of Research and Development
    Grant/Contract #:
  • How to Obtain Report

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    Date Linked: 05/28/2009