1 Introduction

The adoption of Voluntary Environmental Certification (VEC) is becoming increasingly widespread (Boiral et al., 2018). Telling examples of this are the ISO 14,001 environmental management system (EMS) standard with 348,218 firms in 177 countries registered by the end of 2020 (ISO, 2021), and Eco-Management and Audit Scheme (EMAS) EMS certification with 3851 certified organisations in 26 European countries by June of 2021 (European Commission, 2021).

Several academic studies have observed an association between VEC and the improved environmental performance for both EMAS (Heras Saizarbitoria et al., 2014; Testa et al., 2018) and ISO 14,001 (Boiral et al., 2018; Sartor et al., 2019). For instance, Boiral eta al. (2018), after systematically reviewing of 94 academic papers on the adoption of ISO 14,001, despite the somewhat scattered and contradictory findings, concluded that a positive relationship between the adoption of ISO 14,001 and environmental performance was prevalent in the vast majority of the cases studied. Similarly, Heras-Saizarbitoria et al. (2014) and Tourais & Videra (2016) also pointed out the aforementioned positive relationship in their reviews regarding EMAS. However, Marrucci and Daddi (2022), based on a sample of nearly 300 EMAS-registered manufacturing organisations from Italy and after evaluating more than 5000 environmental indicators over a three-year period, highlight that environmental performance is generally stable, with a slight downward trend. As the impact of the VEC on environmental performance still remains controversial, Erauskin-Tolosa et al. (2020) recently conducted a meta-analytical study based on 53 empirical studies comprising a sample of 182,873 companies and reaffirmed that both EMAS and ISO 14,001 certifications positively influence corporate environmental performance.

In the same vein, the relationship between VECs and CFP has been widely studied and compiled in a number of review studies (Castka & Corbett, 2015; de Vries et al., 2012; Molina-Azorín et al., 2009; Sartor et al., 2019), with contradictory and inconclusive findings, little of which research can analyse reverse causality. Some studies have proposed the positive influence of VEC on CFP (Kollman & Prakash, 2001; Montabon et al., 2000; Pan, 2003; Poksinska et al., 2003), while others (Boiral, 2007, 2011; Christmann & Taylor, 2006; Jiang & Bansal, 2003) posit that VEC’s implementation costs negatively affect CFP. Albertini’s (2013) meta-analysis of the relationship between corporate environmental management and financial performance highlighted that the relationship is strongly influenced by the different environmental and financial performance measures taken, however, VEC adoption was not considered as a specific corporate environmental management measurement. Heras-Saizarbitoria et al. (2011) based on data obtained from Spanish 268 ISO 14,001 certified firms and 7232 non-certified firms found the prevalence of selection effects over treatment effects with more successful firms being more likely to adopt VEC than less profitable firms. Testa and D’Amato (2017) studied the bidirectional causality between a firms’ environmental responsibility and its financial performance from a set of firms within the Italian manufacturing sector in the period 2005–2014 and found market performance to positively influence a firm’s probability of acquiring environmental certification, whereas environmental certification did not appear to affect company performance.

Meta-analyses can both summarise and quantify the differences and similarities found, because they examine previous studies in a structured and systematic way and combine the results of several studies. (van Vliet et al., 2016). Furthermore, meta-analysis has also proven to be an efficient statistical methodology in social sciences (Botella Ausina & Sánchez Meca, 2015) when multiple individual studies have shown inconclusive or contradictory results (Erauskin-Tolosa et al., 2020; Orlitzky et al., 2003; Post & Byron, 2015; Sánchez-Ballesta & García-Meca, 2007). Therefore, the aim of this article is to examine the relationship between VEC and corporate economic performance since meta-analytic studies provide additional evidence that may not be obtained from an individual study (Lipsey & Wilson, 2001), with a particular interest in determining the direction of causality in that association. To support this objective, and based on the methodology of Orlitzky et al. (2003), we conducted a meta-analysis on a sub-sample of independent studies showing a time lag between the introduction of VEC and the measurement of firms’ financial performance.

So, this paper contributes to the literature in at least three ways. Firstly, it seeks to offer more information on the implications of VEC for the financial performance of companies, given that meta-analysis is a useful quantitative technique for the review of inconclusive and conflicting results by standardising and aggregating those obtained in empirical studies (Damanpour, 1991), since meta-analysis enables us to analyse the influence of variables partially studied in a range of previous study contexts. Secondly, this study aims to determine the extent to which different types of VEC, as well as their degree of maturity or internalisation, affect companies’ financial performance. Thirdly, it examines both treatment and selection effects, i.e. whether the improved financial performance corresponds to the beneficial effects of the implementation of VEC or, on the contrary, the improved CFP is prior to accreditation.

The remainder of the article is organised as follows: The following section reviews the background literature on the overall relationship between VEC and CFP and presents the hypotheses of the present study. Next, a breakdown of the meta-analysis technique, the procedures used in this article, and the results of the meta-analytic investigation are provided. Finally, the theoretical and managerial implications of the results are outlined, and the limitations of this study are listed, along with recommendations for future research.

2 Literature review and research framework

2.1 Sampling and literature review

For conducting a meta-analysis of the relationship between VEC and company performance, we first took the necessary steps to construct a comprehensive database (Botella & Gambara, 2006; Field & Gillett, 2010). We began by searching for empirical results in the English-language literature stored primarily on two databases: Web of Science (WoS) and Scopus. As Chen eta al. (2021) emphasize, the WoS database collects the most important academic journals and is one of the foremost main databases in the world for searching top-level academic subject and Scopus is one of the world’s leading peer-reviewed literature databases, covering more than 30,000 journals. In addition, Google Scholar allowed us to search repositories, universities and scholarly websites, while the reference lists from each study in the sample were useful for conducting further manual searches to identify additional articles.

Therefore, in order to limit the search to empirical studies, two groups of search terms were used. The first group, related to VEC, contained the following keywords: “ISO 14001”, “EMAS”, “environmental management system” and “certification”. The second group, designed to limit the search to articles analysing companies’ financial performance, contained the keywords “company financial performance”, “organisational performance”, “economic performance”, “financial performance”, “return on assets”, “return on sales”, “growth”, “return on equity” and “market return”. In the case of the WOS and Scopus databases, the search covered the keyword field, while in Google Scholar the search was conducted in the full text. A total of 456 potentially relevant journal articles were identified after eliminating duplicate articles found in the three databases.

Subsequently, a second review was applied to detect articles that established a relationship between VEC and CFP. A practical screening was carried out on the 456 documents found in the previous step. On the one hand, non-empirical studies, such as, theoretical or conceptual articles, literatures reviews or short communications were excluded, i.e. 291 articles were excluding, leaving 165 papers. On the other hand, taking the existing meta-analysis literature as a model (Erauskin-Tolosa et al., 2020; Zubeltzu-Jaka et al., 2018), we defined the inclusion criteria as follows: (1) the study must be an empirical study; (2) the study must report the sample size; (3) a correlation or other reliable statistic must be reported in the study; and (4) the approach to data collection must be reported. Furthermore, in order to avoid over-representation bias, we excluded from this meta-analysis any studies drawing on the same data set. Following a careful reading and analysis of the 165 selected articles, we excluded 108 papers that failed to meet our inclusion criteria. Thus, the final sample consisted of 57 papers—a set of studies that covers the minimum required for meta-analysis as suggested by Heldges and Olkin (2014)—which provided a total of 60 independent studies sample from 2006 to 2021 studying the association between VEC and financial performance. Appendix A provides the articles included in the sample and Fig. 1 shows the distribution of papers selected for the current study for the period 2006–2021. There is a positive trend, being the first paper that published by Link and Naveh in 2006, and a substantial growth from 2015 onwards.

Fig. 1
figure 1

Distribution of reviewed papers. 2001–2021

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The articles included in the sample are published in 29 different academic sources. Figure 2 shows how the reviewed articles are distributed among the different journals containing at least two articles in the sample. Most were published in prestigious high-ranking WoS journals, which serves to underline the quality of this systematic review. The Journal of Cleaner Production, for example, holds the leading role with fifteen papers, followed by Corporate Social Responsibility and Environmental Management with seven papers.

Fig. 2
figure 2

Distribution of reviewed papers by journal with at least two selected articles

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2.2 Research framework and development of hypotheses

Is this section, we formulate our hypotheses on the relationship between VEC and CFP and the different effects associated with type of VEC, maturity of EMS certification, type of CFP measurement and level of implementation of the VEC. Figure 3 shows the research framework.

Fig. 3
figure 3

Research framework

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According to Nishitani (2009) the adoption of externally assessed VEC is a clear signal to the market about the company’s commitment to environmental protection. Potoski and Prakash (2005) also confirm that the implementation of ISO 14,001 facilitates the improvement of a company’s environmental performance. However, empirical results on the relationship between VEC adoption and CFP (CFP) are somewhat inconsistent (Heras-Saizarbitoria et al., 2011a). Watson and Emery (2004) suggest that there are academic studies that have found no effect of VEC implementation on a firm’s financial performance. For example, Link and Naveh (2006) analysed whether ISO 14,001 contributes to reducing environmental impact and thus to improving the financial performance from a sample of Israeli firms. The results corroborate the first part of the hypothesis, but not the second. More recently, Heras-Saizarbitoria et al. (2016) examined a group of 361 Spanish firms and found that the majority of EMAS implementers surveyed perceived the certification costly and ineffective, which caused them not to renew the certification. In contrast with this evidence, some scholars find a positive impact of VEC implementation on the financial performance of the firm. For example, based on self-reported data from Chinese firms Feng and Wang (2016) it was observed that VEC implementation influences positively on financial performance. Likewise, Wahba (2008) points out that other existing empirical studies have shown that the implementation of ISO 14,001 leads to higher CFP at the firm level and Daddi et al. (2015) claim that the adoption of ISO 14,001 contributes to improving country-level economic growth. Considering that extensive literature highlights the important impact of ISO standards in boosting CFP (Feng & Wang, 2016), an argument can be made that ISO 14,001 can play a positive role on CFP because a stakeholders’ involvement in a firm’s ISO 14,001 can become, as Delmas (2001) pointed out, a valuable and unique organisational capability.

Based on the above discussion, we propose the first and second hypotheses:

Hypothesis 1

(H1). The overall relationship between the firm’s VEC (e.g., ISO 14,001, EMAS) and CFP is positive.

Hypothesis 2

(H2). The relationship between the firm’s EMS certification (e.g., ISO 14,001, EMAS) and improved FP is moderated by the international VEC adopted (either ISO 14,001 or EMAS).

In this study, CFP measurement is categorised into three major forms: CFP perception, accounting indicators and market indicators. Some studies (Cheng et al., 2019; Daddi et al., 2016, 2021; Boiral et al., 2017; Agan et al., 2013) examined CFP data collected through surveys in which companies answered questions relating to their perception of performance indicators such as productivity or their company’s returns. Other authors (Lin et al., 2014; Pons et al., 2013; Rehman, 2020) measure FP through accounting indicators. For example, Return on Assets (ROA), which is calculated as a fiscal year’s earnings divided by its total assets, is a measure of a company’s profitability. Similarly, the earnings before interest, taxes, depreciation, and amortization (EBITDA) calculation, which measures the cash flow of a company, is an effective accounting instrument for knowing how much cash is being generated to pay dividends or reinvest in the company (Becker-Blease, Kaen, Etebeari & Bauman, 2010). Meanwhile, Wahba (2008), Testa & D’amato (2017), Nishitani (2020) analyse the financial performance of a company based on market indicators such as price-to-book value (PBV) ratio, which captures market evolution relative to a company’s growth on its assets (Testa & D’Amato, 2017), or Tobin’s Q, i.e. the ratio between a physical asset’s market value and its replacement value, which measures the market value of a company divided by assets replacement cost of its assets. Among the various studies in our sample that report a negative relationship between a firm’s VEC and financial performance, only one measured the financial performance based on perception, namely Heras-Saizarbitoria eta el., 2016. Conversely, Testa & D’amato (2017), whose study was the only one to use market indicators to measure the FP, found the strongest positive association between EMS certification and improved FP.

In accordance with the above discussion, our third hypothesis is proposed:

Hypothesis 3

(H3): The association between a firm’s EMS certification (e.g., ISO 14,001, EMAS) and improved FP is moderated by the type of CFP measurement (i.e. FP Perceptions, FP Accounting, market measure of FP).

Corbett (2006) and Corbett and Kirsch (2001) indicates that ISO standards spread gradually over time, and companies may adopt ISO standards irrespective of their performance advantages (Nair & Prajogo, 2009; Yeung et al., 2011). As a result, the question facing managers is increasingly not whether they should implement the new standard, but when they should do so.

This meta-analysis contends that the timing decision regarding when companies implement ISO standards holds strategic advantages, particularly in the form of an early-mover advantage that can lead to performance improvements. The literature on competitive dynamics (Barnett & McKendrick, 2004; D’Aveni et al., 2010) offers a theoretical explanation of the strategic benefits associated with the timing of adopting new standards. Only companies that outpace their competitors gain a competitive edge. In essence, the potential performance gains arise from adopting these practices earlier than one’s rivals.

The existing empirical research regarding the relationship between EMS certification and FP deals with different aspects of EMS implementation. Some studies have collected data on certified and non-certified firms in order to compare the impact of EMS implementation on their economic performance (Testa & Iraldo, 2010; Mazzanti & Zoboli, 2009). Pons et al. (2013) pointed out a negative but non-significant effect of ISO 14,001 implementation on a firm’s financial performance, while Naranjo et al. (2020) underlined that, in general, the possession of a VEC does not positively affect a firm’s profitability. However, Husnaini and Tjahjadi (2021) found that the adoption of ISO 14,001 makes investors react positively, thus leading to an increase in the firm’s value. Others have collected data on the effects of the length of time since first obtaining VEC in order to take into account the long-term pay-off of EMS for certified companies (Daddi et al., 2016; Heras-Saizarbitoria et al., 2016; Su et al., 2015). After examining the year-by-year influence of ISO 14,001 certification on a firm´s financial performance using 63 certified firms from the Shenzhen and Shangai Stock Exchanges in China, Wang and Zhao (2020) concluded that companies’ financial performance is worsened immediately after ISO 14,001 certification implementation. Su et al. (2015) demonstrated, in turn, that firms achieve improved financial performance through the early implementation of ISO 14,001 in more competitive environments In contrast, Daddi et al. (2016) found that companies that had implemented EMAS certification in response to key customer demand displayed improved their financial performance.

Based on the above discussion, the fourth hypothesis is posited:

Hypothesis 4

(H4): The relationship between a firm’s EMS certification (e.g., ISO 14,001, EMAS) and improved FP is moderated by the maturity (i.e. experience of use) of the certified EMS.

As defined in the existing academic literature (Ambec & Lanoie, 2008; Porter & van der Linde, (1995), the development of environmental initiatives such as the implementation of VEC can provide a competitive advantage for companies. But few studies have examined the influence of the level of internalisation of the VEC on the relationship between VEC and CFP improvement, and the reported results are contradictory. For example, Daddi et al. (2016) suggested that an effectively internalised management system certainly results in a higher competitive capacity, especially if a company has implemented the VEC in its daily practices as a response to key customer demand. Darnall et al. (2008) reported that a more comprehensive EMS allowed firms to achieve better business results. Some other papers have examined the key role of EMS internalisation in the day-to-day work of an organisation, i.e., Daddi et al. (2021) demonstrated the positive influence of the mediating role of EMS internalisation, but considering green supply chain management (GSCM), while Marrucci et al. (2021) considered the circular economy. However, according to Nishitani (2011), not only internalisation but also various other aspects may contribute to improving a company’s economic performance.

Thus, a fifth hypothesis is proposed as follows:

Hypothesis 5

(H5): The influence of a firm’s EMS certification (e.g., ISO 14,001, EMAS) on FP is moderated by the level of internalisation of the certified EMS.

The question of whether ‘it pays to be good’ (indicating treatment effects) or if only financially successful entities can ‘afford to be good’ (reflecting selection effects) is among the longstanding debates in the realm of environmental management literature (Heras-Saizarbitoria et al., 2011).

For selection effect, the “slack resources” theory (Waddock & Graves, 1997) posits that organizations maintaining an extra pool of resources may be better positioned to adapt to changing circumstances and capitalize on new opportunities. In the context of corporate environmental certification and its relationship with financial performance, this theory can offer an insightful perspective.

When a company seeks environmental certification, it often requires substantial investments in cleaner technologies, sustainable practices, and environmental management enhancements. These initial efforts can generate additional costs and intensify pressure on existing resources. However, companies with existing slack resources, be it in terms of financial capital or operational capacity, can more easily absorb these costs without sacrificing short-term financial performance.

For instance, as highlighted by Barney (1991), companies with slack resources can afford to invest in corporate social and environmental responsibility projects, such as environmental certification, without compromising immediate financial results. These additional resources provide them with a competitive advantage by demonstrating their commitment to sustainability, which can be an attractive factor for environmentally conscious investors and consumers.

Furthermore, slack resources can help companies mitigate the risks associated with environmental certification, as they have the capability to address unforeseen challenges that may arise during the implementation process. This responsiveness to challenges can uphold the company’s reputation and market position, ultimately influencing its long-term financial performance (Hitt et al., 2016).

In summary, from the standpoint of the “slack resources” theory, companies with slack resources are in a more advantageous position to pursue and sustain environmental certification. While obtaining such certification may incur initial costs, the availability of additional resources enables them to manage these costs without compromising their financial performance. Ultimately, this can offer competitive advantages and sustainable benefits.

For the treatment effect, on the other hand, it has been considered that environmental management can enhance stakeholder relationships and proactively prevent costly conflicts with stakeholders (Hull and Rothenberg, 2008). Both stakeholder theory and institutional theory share the concept of organizations existing within a broader social system that influences their behavior. An organization’s interactions with institutions and stakeholders are believed to have a pivotal role in defining and determining its success (Donaldson & Preston, 1995).

Furthermore, green management offers opportunities to reduce costs and boost revenues. According to Ambec and Lanoie (2008), companies can leverage four avenues to reduce costs: managing risks and relationships with external stakeholders, controlling expenses related to materials, energy, and services, optimizing the cost of capital, and managing labor costs. Additionally, there are three avenues for increasing revenues: gaining improved access to specific markets, product differentiation, and marketing pollution-control technology.

In that context, the existing empirical research has also studied the causal effect direction between VEC and FP, i.e., there are some studies that have analysed whether there exists a forward causation between environmental proactivity and changes in FP (treatment effect) or a reverse causation (selection effect) (Heras-Saizarbitoria et al., 2011; Castka & Corbett, 2015; de Vries et al., 2012; Molina-Azorín et al., 2009; Sartor et al., 2019). The findings are mixed and sometimes contradictory. For example, in order to identify the bidirectional relationship between ISO 14,001 and financial performance, Heras-Saizarbitoria et al. (2011) compared ISO 14,001 accredited firms’ actual sales and profitability both before and after becoming ISO 14,001 certified. The authors found that those firms with a greater propensity for obtaining a certificate were indeed more profitable. Therefore, Heras-Saizarbitoria et al. (2011) concluded that selection effect predominated over treatment effect in their study, as stated previously by Dick et al. (2008) for firms pursuing ISO 9001 in the USA, Spain and Denmark. Some authors argue that better performance is due to the beneficial effects of VEC, in other words, that treatment effect predominates over selection effect. Similarly, Li et al. (2017) showed that financial performance is significantly positively correlated with ISO 14,001 certification adoption and Testa and D’Amato (2017), after studying the bidirectional relationship, concluded that while VEC does not have a positive influence on firms’ market performance, firms’ financial performance does seem to positively affect VEC acquisition. By contrast, based on a treatment effect model, Nishitani et al. (2020) concluded that companies implementing ISO 14,001 for a greater number of years are more likely to have a lower shareholder value; that is, there exists a negative treatment effect. In addition, according to the findings of Yan and Zhang (2021), obtaining ISO 14,001 has no effect on the value of a firm. Figure 4 summarises the distribution of studies considered in our meta-analytic review according to the causal effect.

Fig. 4
figure 4

Distribution of causal effect direction

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Based on the above discussion, the sixth and the seventh hypotheses are thus proposed:

Hypothesis 6

(H6): There is a treatment effect when a firm’s prior EMS certification is positively correlated with subsequent higher financial performance.

Hypothesis 7

(H7): There is a selection effect when companies with higher prior financial performance are positively correlated with subsequent higher EMS certification.

3 Research method

3.1 Data analysis

Meta-analysis is a methodological procedure for the inclusion of previous empirical research on the same topic with the purpose of establishing generalisations based on the application of statistical methods (Botella Ausina & Sánchez Meca, 2015; Cooper et al., 2009; Lipsey & Wilson, 2001). In other words, in a meta-analysis, the results of primary studies are used as data, appropriately transformed into a common metric called ‘effect size’, which enables their numerical comparison, aggregation and analysis of previous studies (Lipsey & Wilson, 2001).

As Lipsey and Wilson (2001) point out in a meta-analysis, ‘effect size’ refers to the strength of the association between two variables. In our study, the average correlation coefficient approximates the strength of the association between a firm’s VEC and CFP. Therefore, this study follows the meta-analysis data processing method proposed by Hedges and Olkin (2014). It analyses the effect size between VEC and CFP from a sample of 60 independent studies. To do this, we first extract from the selected articles the reported Pearson’s coefficient (r-value), i.e. a correlation between VEC and CFP. If the r-value is not reported, we extract other statistic that can be transformed into r-value such as t-value, F-value and chi-square. In addition, when only standardised regression coefficients (B) are observed in the studies, the method of Peterson and Brown (2005) is used to transform the B coefficient into correlation coefficient, as in previous meta-analyses (e.g. Erauskin-Tolosa et al., 2020; Wagner et al., 2015).

Secondly, the weighted mean (\(\:\stackrel{-}{{z}_{r}}\)) is calculated using the Fisher’s \(\:{Z}_{r}\) normalised metric (see Eq. (1)):

$$\:\stackrel{-}{{z}_{r}}=\frac{\sum\:_{i=1}^{k}{w}_{i}{z}_{{r}_{i}}}{\sum\:_{i=1}^{k}{w}_{i}}$$
(1)

where \(\:{w}_{i}\) is the weighted value of study \(\:i\); \(\:{z}_{{r}_{i}}=\frac{1}{2}{log}_{e}\left(\frac{1+{r}_{i}}{1-{r}_{i}}\right)\) is the Fisher’s \(\:{Z}_{r}\) normalised metric (Field and Gillet, 2010) being \(\:{r}_{i}\) the correlation coefficient between VEC and CFP found in study i; and \(\:k\) is the total number of studies included in the meta-analysis.

Thirdly, the confidence interval (CI) at 95% confidence level is computed as follows (see Eq. (2)):

$$\:CI=\left[\stackrel{-}{{z}_{r}}-1.96SE\left(\stackrel{-}{{z}_{r}}\right)\:;\:\stackrel{-}{{z}_{r}}+1.96SE\left(\stackrel{-}{{z}_{r}}\right)\:\right]$$
(2)

Fourthly, Fisher’s \(\:\stackrel{-}{{z}_{r}}\) normalised metric is converted back into correlation coefficient by means of Eq. (3):

$$\:\stackrel{-}{r}=\frac{{e}^{2\stackrel{-}{z}}-1}{{e}^{2\stackrel{-}{z}}+1}$$
(3)

In addition, two different statistics have been used for the analysis of homogeneity (heterogeneity) among studies: (i) Cochram’s Q statistic which is calculated by Eq. (4) and tests the null hypothesis that all studies are homogeneous and (ii) Higgins’ I2 statistic as a method to quantify heterogeneity (see Eq. 5):

$$\:Q=\sum\:_{i=1}^{k}{w}_{i}({z}_{{r}_{i}}-\stackrel{-}{{z}_{r}})$$
(4)
$$\:{I}^{2}=\frac{Q-(k-1)}{Q}$$
(5)

If the effect size parameters are heterogenous across studies according to the both \(\:Q\) and \(\:{I}^{2}\) statistics mentioned above, an alternative method to estimate the mean effect size of studies is the random effects model (Borenstein et al., 2009). As proposed by Lipsey and Wilson (2001), the random effects model also allows us to make extrapolated inferences outside the sample. In addition, we have implemented a Z-test to evaluate whether the various subgroups are statistically different (e.g. Galdos-Urbizu et al., 2024; O’Boyle et al., 2012; Wagner et al., 2015; Zubeltzu‐Jaka et al., 2020).

As Table 1 shows, the value of Cochram’s Q statistic (Q = 1,930.42) and Higgins’ I2 statistic (I2 = 96.94 ) which represents the proportion of variance in the estimates that is due to variation in effect size parameters across studies, confirm that the studies in our sample are not homogeneous (see also the figure of forest plot in the annex figure A.1). Therefore, the random effects model method is applied and several moderating variables are analysed in our analysis. The first moderator is intended to examine whether different VEC types (ISO 14,001 or EMAS) show a significant difference with respect to the overall FP. The second moderator aims to evaluate whether the type of FP measurement may moderate the relationship. Drawing on the studies listed in Table A1, the types of FP measurement were categorised as follows: (1) Respondents’ FP perceptions; (2) FP accounting measurement; and (3) FP market measurement. The fourth and fifth moderators serve to analyse the impact of the maturity and internalisation of the EMS, respectively. Lastly, following Orlitzky et al. (2003) methodology cross-sectional studies, i.e. studies that did not present a time gap between VEC adoption and corporate’s financial performance, were excluded from the main sample in order check reverse causality and potential bidirectionality, distinguishing the set of studies on selection effect (prior improved FP and lagged EMS certification) from the subgroup assessing treatment effect (prior EMS certification and lagged improved FP).

Table 1 Relationship between Voluntary Environmental Certification and Corporate Financial performance
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For the study, we used Comprehensive Meta-Analysis software (Version 3.3.070).

3.2 Publication bias

Publication bias is one of the main types of bias in meta-analytic studies (Rosenthal, 1979) and refers to the fact that the results that are not significant among the studied variables are less likely to be published. To study the presence of publication bias, we used Rosenthal’s index of tolerance to null results (fail-safe N). This index estimates the number of missing studies that would nullify the effect size obtained (i.e., 0.079). In our meta-analysis, the statistic was 10.061, implying that the number of unpublished studies required is very high, which allows us to discard the existence of a publication bias.

Based on Duval and Tweedie’s (2000a, Duval & Tweedie, 2000b) trim-and-fill method, Fig. 5 shows an asymmetrical funnel plot which reveals that 3 studies should have been included, with negative results, although that does not change the direction of the results, which increases the robustness of the observed direct effect of our analysis. The funnel plot tool has a burden of subjective interpretation that needs to be complemented with more rigorous statistics (Botella Ausina & Sánchez Meca, 2015) such as the one proposed by Egger et al. (1997) which in our case establishes that there is no evidence of publication bias (t (57) = − 0,86 p = 0.395).

Fig. 5
figure 5

Funnel plot of standard error by Fischer’s Z

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4 Results of the meta-analysis

4.1 Hypothesis testing

Table 1 reports the HOMA results pertaining to hypotheses H1 to H7.

Hypothesis 1

is accepted: there is a positive association between EMS certification & FP improvement, due to the fact that the mean effect size of the relationship is 0.079 (k = 60) and the confidence interval does not include zero (which implies that the effect is significant).

The robustness of the results was assessed by Q-test analysis and I² statistic, which indicate that the observed direct result is not homogeneous and that the variability of the results is due to the existence of moderating variables for which the observed direct effect varies. Table 1 also contains meta-analytic data to test moderating variables in research hypotheses H2 to H7.

H2 states that the firms certified by EMAS or by ISO 14,001 present varying degrees of association with improved financial performance. According to the results, the effect estimated between financial performance and the firms certified by EMAS (r ̅= 0.104, p < 0.01) is greater than the coefficient estimated for ISO 14,001-certified firms (r ̅= 0.16, p < 0.5). In both cases the results are significant, as the associated CIs do not include zero (i.e., [0.03, 0.18] and [0.02, 0.09], respectively). In spite of this, there is no significant difference between ISO 14,001 and EMAS, according to the findings of the meta-analysis (z = 1.18; p = 0.24).

H3 determines that the relationship between EMS certification and FP improvement is different if FP is measured by accounting or a market FP measurement rather than the firm’s own perceptions. The HOMA results reveal that, as types of effect size, accounting and perceptions measurement are positive and significant: accounting (r ̅= 0.04, p < 0.05) and the firm’s own perceptions are clearly higher (r ̅= 0.198, p < 0.01), while market measurement is not significant. Additionally, based on findings reported by the meta-analysis results in this case there is a significant difference between accounting and the firm’s own perceptions (z = 4.39; p < 0.01). This supports H3, i.e., that the type of measurement of improved FP may moderate the relationship between VEC and CFP improvement.

H4 predicts that the maturity of the VEC may have a positive effect on the association with VEC-improved CFP. According to the findings, the degree of maturity does not bring any additional benefits to the relationship. H4 is therefore rejected.

H5 determines that the relationship between the VEC’s level of implementation and improved CFP is positive. The results reveal that studies evaluating the level of implementation of VEC (r ̅= 0.309, p < 0.01) show a greater association with improved CFP than studies only assessing whether the firm is certified or not (r ̅= 0.051, p < 0.01). In addition, a z-test reveals that the two subgroups are statistically different (z = 4.97; p < 0.01) which gives support for H5.

H6 states that there is a treatment effect when a firm’s prior EMS certification is positively correlated with subsequent higher FP. The results confirm that EMS certification has a positive effect on FP improvement, due to the fact that the subsample of studies designed to study the treatment effect shows a significant positive value 0.069 (k = 15, N = 24,333) and the confidence interval does not include zero (which implies that the effect is significant, p < 0.05).

H7 states that a selection effect is identified when companies with higher prior FP are positively correlated with a subsequent higher degree of EMS certification. The results confirm that there is also a selection effect, given that the subsample of studies with prior EMS certification data shows a significant positive value 0.133 (k = 6, N = 42,264) and the confidence interval does not include zero (which implies that the effect is significant, p < 0.05).

Taken together, the findings for H6 and H7 suggest a virtuous cycle with quick cycle times or concurrent bidirectionality.

4.2 Robustness checks

Fifteen independent studies out of the sixty that make up the sample are based on surveys in which those respondents who had been involved in the process of implementing the VEC supplied the CFP data. Several authors have considered that improved FP based on self-reported perceptions may be biased (Donaldson & Grant-Vallone, 2002) as the respondent could have a vested interest in overestimating it through inflated claims that their firms have achieved superior performance thanks to EMS certification (de Jong et al., 2014; Heras-Saizarbitoria et al., 2011; Nawrocka & Parker, 2009).

To test the robustness of the findings, we excluded articles with self-reported perceptions and focused only on studies presenting more objective financial data such as commercial databases containing accounting and market financial information.

The results confirm hypothesis 7 (H7b in Table 1) regarding selection effect, with a significant positive value 0.155 (k = 5, N = 31,424) and the confidence interval does not include zero ([0.05, 0.25], p < 0.01).

The results show a lower significance of treatment effect: 0.022 (k = 10, N = 20,966), and the confidence interval includes zero (which implies that the effect is not significant, p = 0.55). The results do not support hypothesis 6 (H6b in Table 1), as it seems that part of the evidence obtained to date on the treatment effect of EMS on improved FP is based on the perceptions of firm managers, so these results could be affected by self-report bias.

5 Discussion

Firstly, this research contributes to the research community on VEC. The relationship between VEC and CFP was inconsistent. Although our study found that VEC and CFP are positively correlated, the results show that the degree of association of ISO 14,001 is higher than that of EMAS; however, no study among the papers compares the effect of ISO 14,001 and EMAS on CFP. In addition, when comparing the number of studies that consider the adoption of ISO 14,001 certification with the adoption of EMAS certification, the latter appears to be less studied. The lack of research regarding EMAS certification adoption reflects the popularity of ISO 14,001 certification adoption that has been previously highlighted by Marrucci et al. (2019) who underline that while the number of ISO14001 certificates in Europe in 2017 was 109,113, two years later the total number of EMAS-accredited companies was 3623. Thus, it is likely that an insufficient sample of EMAS registered organisations could have affected the analysis. However, the present study broadens the existing literature by presenting evidence that both ISO 14,001 and EMAS certification adoption contribute positively to increasing firms’ economic performance.

Secondly, our review of the literature found that the association of EMS certification on firms’ economic performance is effective in various aspects. Albertini (2013) adopted three broad subdivisions of various firms’ economic performance: market measurement, accounting measurement and organisational measurement. In our research, and following the subdivision proposed by Albertini, the correlation of EMS adoption and CFP varies depending on how financial performance has been measured. Financial performance perception measurement shows the strongest relationship with VEC adoption, followed by accounting measurement. Therefore, we agree with Daddi et al. (2022), who also underlined that when the expected benefits from the adoption of a VEC are met, the satisfaction of environmental manager is high, which ensures that the certified companies maintain committed to the environmental certification. Nevertheless, the relationship between VEC adoption and market CFP measurement was found to be insignificant. Since there are few studies on the correlation between VEC adoption and market CFP measurement, future research is required to clarify the relationship through further empirical evidence.

Thirdly, as there are very few studies in the literature that have reported on the effect of VEC internalisation on the relationship between VEC and CFP, the results of this study extend the academic contribution by demonstrating that effectively internalised VEC has a higher positive relationship with improved business performance than simply adopting VEC. Indeed, as consumers and customers increasingly seek products with circular characteristics (Testa et al., 2020), if organisations positively link economic performance with internalisation of EMS, they can ensure substantial adoption of green practices avoiding greenwashing. Moreover, Daddi et al. (2016) highlighted that whenever the internalisation of a firm’s VEC is due to a key-customer response, the company’s competitive capacity becomes higher. However, there are other aspects that contribute to improving a company’s economic performance (Nishitani et al., 2011), and identifying the effect of VEC internalisation on improving a company’s economic performance requires further empirical research.

Fourthly, our study aimed to shed light on the causal relationship and possible circular relationship between VEC and CFP, i.e. selection effect and treatment effect. Prior findings in this meta-analysis had established a positive correlation between these two variables. In addition, the temporal analysis of our meta-analysis (from which cross-sectional studies have been excluded) yields stronger results regarding the influence of past financial performance on a company’s level of certification (selection effect) than the effectiveness of prior certification on CFP (treatment effect) which is consistent with the results obtained by Heras-Saizarbitoria et al. (2011), Li et al. (2018), Agan et al. (2013), Testa & D’Amato (2017). As Riaz and Saeed (2020) suggest the positive evaluation of investors driven by being ISO14001 certified fades over time as the adoption of a VEC becomes more widespread. Therefore, organisations should clearly communicate both the environmental and financial benefits of voluntary environmental certification to their stakeholders. This would promote the legitimacy of organisations’ environmental management, as legitimacy is not a fixed status but the product of a continuous social negotiation between different stakeholders.

6 Conclusions

Overall, the results of this work provide a broader understanding of the benefits of VEC on the financial performance of companies and explore future lines of research for managers, decision-makers and researchers in the sector. This work contributes significantly to the existing knowledge base in the environmental certification research community, especially for the implementation of environmental certifications in companies. Therefore, apart from the theoretical implications, this analysis has useful implications for managers in a variety of industries.

The present research analyses the results of a systematic study of the relationships between VEC adoption and corporates financial performance based on a meta-analysis approach. This investigation was conducted considering research articles published in prestigious journals between 2006 and 2021. The research findings indicate that VEC influences positively on CFP at an aggregate level. In addition, the present study based on moderating factors, has explored some of the different interrelationships between VEC and CFP, such as whether different types of environmental certification (i.e. ISO14001 or EMAS) show a different degree of association. Similarly, it has been analysed whether the degree of association differs according to both the qualification and the degree of implementation of environmental certificates. Additionally, as financial performance can be measured in different ways, this paper has also examined whether the relationship between VEC and CFP varies depending on how CFP is measured.

We also wanted to study whether the improvement of companies’ financial performance is a precondition for environmental accreditation or, on the contrary, the accreditation of companies implies the improvement of their financial performance. The results are consistent with the ‘slack resources’ hypothesis (Waddock & Graves, 1997), i.e. that VEC adoption is a consequence of previous good financial performance. In essence, more profitable firms are more likely to adopt VEC than their less profitable counterparts. The results also show that the adoption of VEC also has positive downstream effects on CFP, creating a virtuous circle and supporting that managers may be more willing to adopt VEC as part of their strategy to increase CFP.

In addition, not only the adoption but also the thorough internalisation of VEC is crucial to guarantee a greater improvement in financial performance. The higher the level of integration within the organisational activities and day-to-day processes, the better the reputation of an organisation (Daddi et al., 2021) and as Rennings et al. (2006) showed, a careful EMAS design is also effective in improving the economic performance of an organisation.

However, the methodology applied in this study has a number of limitations. The present analysis considered relevant research studies published in reputable journals but excluded unpublished studies. However, the calculation of the fail-safe number allowed for an assessment of the bias, which concluded that the results obtained were robust. Further, the representativeness of the sample of companies observed in the present research was related to ISO 14,001 certified companies in particular since there is a lack of empirical research papers published for EMAS certified companies. Additionally, there was a limited number of articles to deepen the study of both effects: treatment and selection.

The above-mentioned limitations of the study, however, allow us to determine the direction of future research. On the one hand, due to the incomplete selection of articles further evidence-based analysis is awaited in the future, which will provide the opportunity to test the robustness of the suggested hypotheses with a larger sample size. On the other hand, it will be interesting to examine whether or not the impact of the adoption of a VEC on CFP is homogeneous for firms in both developed and developing countries. In addition, future research could carry out further empirical studies on differing types of industry, together with whether CFP is positively related to VEC adoption in each industry or whether it varies by industry type. Finally, as meta-analysis only studies the linear relationship between VEC and CFP, further studies are needed to analyse their non-linear relationship.