Going “green,” or implementing environmentally friendly practices, is a trend throughout the business world—and beyond trendiness, environmental practices can have a significant impact on the health of the planet and, it turns out, on productivity.
New research indicates companies that voluntarily adopt international “green” practices and standards have employees who are 16 percent more productive than the average.
Researchers at UCLA conducted the study. “Adopting green practices isn’t just good for the environment,” said Professor Magali Delmas, an environmental economist at UCLA’s Institute of the Environment and Sustainability and the UCLA Anderson School of Management. “It’s good for your employees and it’s good for your bottom line.
“Employees in such green firms are more motivated, receive more training, and benefit from better interpersonal relationships,” Delmas added. “The employees at green companies are therefore more productive than employees in more conventional firms.”
For the study, “Environmental Standards and Labor Productivity: Understanding the Mechanisms That Sustain Sustainability,” Delmas and colleagues 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, according to a UCLA press release. 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.
The researchers determined each company’s productivity by taking a logarithm of its value added (revenue minus costs), divided by the number of employees, which produced the average value of production per employee, the press release noted. They discovered a difference of one standard deviation, which corresponded to 16 percent higher-than-average labor productivity, in firms that voluntarily adopted environmental standards.
“It’s a counterpoint to people thinking that environmental practices are detrimental to the firm,” Delmas said. “Green practices make a company more attractive because so many employees want to work for a company that is green, but we also argue in this paper that it’s more than just wanting to work there—it’s working more.”
The findings are published online in the Journal of Organizational Behavior.