Comparative Advantage:  The Impact of ISO 14001 Environmental Certification on Exports

Relative to the enormous acceptance of the ISO 9000 quality standard, the ISO 14001 environmental management certification has been met with only moderate enthusiasm among industrial facilities. The literature on corporate motivation for ISO 14001 participation is relatively modest considering the enormous number of publications reviewing other aspects of its adoption and implementation. It would seem that the present "marketing" package supporting ISO environmental commitments does not seem to offer sufficiently persuasive incentives for increased sales, either domestically or internationally. While researchers assume that a higher export rate of companies is positively associated with higher ISO participation rates, there have been very few empirical studies that support this inference, and conclusions have not been based on data taken from importing countries orfrom a systematic evaluation of expressed corporate preference for products sold by ISO 14001 certified companies. The present study reports the results of a survey to firms in six countries that are Israel's leading trade partners, importing chemicals, textiles, and produce. The survey results confirm that while the international market still considers price and quality as the paramount factors in selection of suppliers, environmental management systems (EMS) are an important feature that is frequently taken into consideration. EMS certification appears to signify a supplier who is managing the business well and exhibiting ethical responsibility. The European market proved to be more environmentally conscious than those in other industrialized parts of the world. EMS offer a particularly valuable advantage for producers wishing to reach European markets. As policy-makers seek to expand the voluntary adoption of EMS, a clear advantage for exporters should be highlighted among national industries.