Does It Really Pay to be Green? An Empirical Study of Firm Environmental and Financial Performance

The link between corporate environmental and financial performance was explored in a survey of 652 US manufacturing firms during 1987-96. Empirical data are cited to show how a firm's attributes and strategic position may jointly cause both lower pollution levels and better financial performance and thereby create the appearance of a direct relationship between the two. The survey shows a real association between lower pollution and improved financial performance. However, it can not be conclusively demonstrated that a firm's choice to operate in cleaner industries is associated with better financial performance.