Want to Improve Productivity? Go Green

Companies now have another reason to go green. New research has found that companies that adopt eco-friendly green practices have employees that are more productive than those that do not.

On average, employees at companies that observe eco-friendly practices were 16 percent more productive than average employees.

"Adopting green practices isn't just good for the environment," said Magali Delmas, co-author of the study. "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. The employees at green companies are therefore more productive than employees in more conventional firms."

To prove this, Delmas, an environmental economist at UCLA's Institute of the Environment and Sustainability and the UCLA Anderson School of Management, and Sanja Pekovic from France's University Paris–Dauphine examined data from 5,220 French companies. The researchers selected two employees from each company and determined the average value of production per employee. Delmas and Pekovic determined that production value by taking the revenue minus the cost of a company and dividing that number by the number of employees at a company.

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"It's truly a big difference between firms that have adopted these practices and firms that haven't," Delmas said. "I expected a contrast, but not such a strong, robust jump in productivity."

The researchers suggest that the boost in productivity can be related to employees seeing green companies as a sign of a positive work environment that encourages cooperation between workers. The research also found that green employers are viewed more favorably by investors because of links to effective management practices and cost-efficient practices. Companies that had voluntarily adopted international standards and labels such as "organic" and "fair-trade"and companies with International Organization for Standardization's ISO 14001 certification, a voluntary industry standard program, were also considered green for the purposes of the study.

"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 research will be published online in the Journal of Organizational Behavior

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