When will going green enhance firm performance?

Studies of firms’ eco-friendly efforts flourish in trade and academic publications. Despite its size, the literature shows equivocal results on the impact of firms’ initiatives to preserve the natural environment. Corporate executives are increasingly sensitive to the topic of sustainable business operations. However, their suspicion of whether the benefits of firms’ environmental commitment can offset the costs is exacerbated by the lack of consensus among empirical studies. To help resolve this issue, we conduct a meta-analysis of 330 correlations (from 94 empirical studies) between corporate environmental commitment (CEC) and firm performance to investigate the boundary conditions under which CEC initiatives can boost business bottom line. The findings may help guide managers in their attempt to effectively integrate sustainability initiatives into business activities. Our study also seeks to reconcile the inconsistent findings in the extant literature, and provide directions for future research.