The Impact of Environmental Management on Financial Performance in SMEs, Sweden

Abstract: Environmental management plays one of the key roles in the current corporate world due to its benefits on brand identity, competitiveness, and customer satisfaction The relationship between environmental management and financial performance has been the focus of many studies in the recent 20 years, however, a steady conclusion is missing on this topic. The impact of environmental management on financial performance in Swedish SMEs in the energy sector has been investigated in this quantitative study. By performing Generalized Least Squares modeling using panel data with 328 observations from Swedish SMEs in the energy sector, the study suggested that environmental management practices do affect a firm’s financial performance. The study emphasis that the green innovation is one of the most important criteria which keeps ahead of its peers in the sector. Another key component in green practices is obtaining ISO14001 certification to promote continual quality. The study also proves that the ratio between male and female executives has no impact on the environmental management of a firm.