A study at the Unversity of California, Los Angeles has found that companies that voluntarily adopt international “green” practices have employees who are more than 15% more productive than the average.
Professor Magali Delmas, an environmental economist at UCLA’s Institute of the Environment and Sustainability, and Sanja Pekovic from France’s University Paris–Dauphine are the first to study how a firm’s environmental commitment affects its productivity. “Adopting green practices isn’t just good for the environment,” Delmas says. “It’s good for your employees and for your bottom line. Employees in such green firms are more motivated, receive more training, and benefit from better interpersonal relationships. The employees at green companies are therefore more productive than employees in more conventional firms.”
The Study
For their study, Delmas and Pekovic collected data from a survey of employees at 5,220 French companies, randomly selecting two employees from each company for a pool of more than 10,000 people. Companies that had voluntarily adopted international standards and eco-labels such as “fair trade” and “organic” or the International Organization for Standardization’s ISO 14001 certification were identified as green. They discovered a difference of one standard deviation, which corresponded to 16% higher-than-average labor productivity, in firms that voluntarily adopted environmental standards.
The Findings
“It’s truly a big difference between firms that have adopted these practices and firms that haven’t,” Delmas says. “I expected a contrast, but not such a strong, robust jump in productivity.” Green certifications should be used by managers to increase productivity, by potential employees as a sign of a better work environment, and by investors as an indicator of good management practices, Delmas said.
“When you talk now to M.B.A. students, there’s a big change in the way they look at their future job,” she said. “They don’t want to work just to make money. They also want to make a difference. There’s a little more social consciousness than there was before.”
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