Does Environmental Management Improve Financial Performance? A Meta-Analytical Review

The relationship between corporate environmental performance and financial performance has received a high degree of attention in research literature and the results are still contradictory. Most of the findings have shown that environmental performance improves financial performance while others have suggested that the relationship is neutral or even negative. Our article integrates prior research studying this relationship and identifies the potential moderators that may have played a role in the apparent inconsistent results observed to date. We conducted a meta-analysis of 52 studies over a 35-year period that confirms a positive relationship between environmental performance and financial performance. Moderators' analysis reveals that the relationship is significantly influenced by the environmental and financial performance measures, the regional differences, the activity sector and the duration of the studies. After discussing the theoretical and managerial implications, this meta-analysis tries to answer the question: When and how does it pay to be green?