1. Introduction Lamond, (2007, 2008), A key question in the field of environmental management is why management matters green.

In general, business ethics and social responsibility, and specifically environmental management, should be taken into account by decision makers. In fact, companies and communities are paying increasing attention to the idea of corporate social responsibility, where management green is an important part. Managers are confronted with environmental issues in their decisions, not only to take into account ethics and social values that should be promoted by companies, but also to ensure sustainable economic success. In fact, commitment to the natural environment has become a strategic issue within the current competitive scenarios. Some authors suggest that environmental management may be a tool, which helps organizations to improve their competitiveness (Ambec and Lanoie, 2008; Hart, 1995; Porter and Van der Linde, 1995; Trung and Kumar, 2005). Others, however, have questioned the optimism of environmental advocates (Jaffe et al., 1995; Walley and Whitehead, 1994). From an empirical point of view, a growing body of quantitative studies has tested this linkage between environmental proactivity and firm performance, the results being varied too. Some works find a positive relationship (Judge and Douglas, 1998; King and Lenox, 2002; Melnyk et al., 2003) but others do not identify a positive impact of environmental proactivity on financial performance (Cordeiro and Sarkis, 1997; Gilley et al., 2000; Link and Naveh, 2006).

However, a systematic review of this quantitative empirical literature has not been carried out. The aim of this paper is to carry out a literature review of the quantitative studies that have analyzed the impact of green management on financial performance in order to examine the main findings obtained with regard to this relationship. In addition, the environmental variables used, the financial performance variables and the statistical analyses employed are also examined. This article seeks to make a contribution to the debate about the reasons to implement environmental strategies, carrying out an exhaustive review of the green management-financial performance link. In our opinion, ethics and social responsibility in general and green management in particular, should be an integral part of business. But we consider that this integration will be favored when decision makers in the firms realize that the implementation of proactive environmental strategies and pollution prevention initiatives may help firms to reach a situation in which both the company's financial performance and the environment will benefit. The remainder of this paper is structured as follows. Section 2 presents the main theoretical arguments about the relationship between environmental variables and financial performance. Section 3 describes the methodology. Section 4 shows and reviews the quantitative studies that have analyzed the impact of environment on financial performance. Finally, Section 5 provides implications and some ideas for future research.

2. Background Firms are facing growing pressure to become responsible and greener. Several stakeholders press companies to reduce their negative impacts on society and natural environment. In fact, social responsibility in general and environmental management in particular, is becoming an integral part of firm activities. In this respect, an important issue is the relationship between these aspects and financial performance. However, from an entirely ethical and sustainability focused view, literature has argued that while there may not necessarily be a positive link between social responsibility and financial performance, it is still desirable from a society's perspective that firms implement good social responsibility and environmental management practices. Bowen (1953) acknowledged that corporate social responsibility is no panacea that will cure the society of all its ills, but he considers it a welcome development that needs to be encouraged and supported. This author, without taking into account the consequences of social actions of firms on financial performance, pointed out that the social responsibilities of businessmen refer to the obligations of firms to pursue those policies and to follow those lines of action which are desirable in terms of the objectives and values of our society. The most prominent objection to corporate social responsibility was the classical economic argument proposed by Milton Friedman (Lee, 2008). Friedman (1962) argued that the social responsibility of a corporation is to make money for its shareholders, considering social responsibility a subversive doctrine that threatened the very foundation of free enterprise society. This author opposed the idea of social responsibility on the grounds that it imposes an unfair and costly burden on shareholders. Later, Wallich and McGowan (1970) made an effort to provide

reconciliation between the social and economic interests of corporations, recognizing that, without demonstrating that social responsibility is consistent with stockholder interests, corporate social responsibility will always remain controversial. Moreover, within the stakeholder theory (Clarkson, 1995, Jones, 1995), the difference between the social and economic goals of a corporation is no longer relevant, because the central issue is the survival of the corporation, and this survival is affected not only by shareholders, but also various other stakeholders such as employees, governments and customers (Lee, 2008). In addition, as said above, we consider that implementation of social and environmental strategies will be favored when managers realize that these initiatives may help firms to reach a situation in which both the firm's financial performance and the society and environment will benefit. If we focus on the main purpose of our article, the influence exerted by environmental management on firm performance, this influence may result from the positive impact on firm costs and differentiation levels. Preventing pollution may enable the firm to save control costs, input, and energy consumption, and to reuse materials through recycling (Hart, 1997; Taylor, 1992). Thus, eco-efficiency involves producing and delivering goods while simultaneously reducing the ecological impact and use of resources (Schmidheiny, 1992; Starik and Marcus, 2000). The generation of pollution is thus regarded as a sign of inefficiency (Porter and Van der Linde, 1995). Companies must learn to view environmental improvement in terms of resource productivity. Managers who focus almost exclusively on the costs of eliminating or treating pollution should rethink their approach, and pay attention to the opportunity costs of pollution (wasted resources, wasted effort, and diminished product value to the customer).

By using proactive environmental strategies, firms can eliminate environmentally hazardous production processes, redesign existing product systems to reduce life cycle impacts, and develop new products with lower life cycle costs (Hart, 1995). More advanced environmental strategies can assist the whole organization in achieving greater organizational efficiency. In fact, firms may save costs by responding to market pressures for greater production efficiency and gathering the low hanging fruit associated with reducing excessive wastes, material, and energy use (Hart and Ahuja, 1996). As for differentiation, reducing pollution may also result in increased demand from environmentally sensitive consumers, because the ecological characteristics of products are likely to be appreciated by these green customers (Elkington, 1994). Moreover, a firm that shows good environmental initiatives will most probably acquire a high ecological reputation (Miles and Covin, 2000). Firms that adopt proactive environmental strategies may benefit from premium pricing and increased sales because of enhanced market legitimacy and greater social approval. Such approval may allow environmentally conscious organizations to market their management procedures as selling points for their products, and create a means to differentiate their products from their competitors (Rivera, 2002). Therefore, green management can provide opportunities to reduce costs and increase revenues. Ambec and Lanoie (2008) point out that there are four opportunities companies can make use to reduce costs (risk management and relations with external stakeholders; cost of material, energy, and services; cost of capital; and cost of labor) and three opportunities to increase revenues (better access to certain markets; differentiating products; and selling pollution-control technology).

More broadly, environmental management can improve stakeholder relationships and prevent costly stakeholder conflicts (Hull and Rothenberg, 2008). Stakeholder and institutional theories share a conceptualization of organizations being embedded within a wider social system that shapes their behavior. An organization's relationships with institutions and stakeholders are assumed to play a significant role in both the definition and determination of success (Donaldson and Preston, 1995). Effective management of relationships with key stakeholders can contribute to enhanced financial performance through the creation, development, or maintenance of ties that provide important resources to companies (Jones, 1995; Brammer and Millington, 2008). Pollution prevention can consequently help firms to reach a win-win situation in which both the firm and the environment will benefit. This idea, which reflects an approach to the effects of the environment on firm competitiveness and profitability, is referred to as the Porter Hypothesis (Porter and Van der Linde, 1995). Nevertheless, this positive view coexists with a more traditional stance, which postulates that an improvement in the environmental impact caused by an enterprise leads to a reduction in its profitability. It is suggested that compliance with environmental regulations incurs significant costs, reducing the capacity to compete (Jaffe et al., 1995). Furthermore, this traditional view responds to the claims made by the supporters of the Porter Hypothesis by saying that, although cost savings can easily be obtained with a number of simple prevention measures, the most ambitious prevention measures may involve costs that exceed the savings to be derived from them (Walley and Whitehead, 1994).

Those suggesting a negative relationship between environmental management and financial performance argue that firms trying to enhance environmental performance draw resources and management effort away from core areas of the business, resulting in lower profits. In this view, managers cannot make both environmental and competitive improvements (Hull and Rothenberg, 2008; Klassen and Whybark, 1999). Agency perspectives on corporate social and environmental performance argue that absent strong control from shareholders, managers can opportunistically use corporate resources to pursue goals that enhance their own utility in ways that are unlikely to provide significant returns to companies. Consequently, good social and environmental performance come at the expense of good financial performance because social and environmental performance make use of firm resources in ways that confer significant managerial benefits rather than devoting those resources to alternative investment projects or returning them to shareholders. To examine the relationship between green management and financial performance, empirical literature has used qualitative and quantitative methods. Some empirical studies addressing the application of environmental management were case studies, using a qualitative approach. These studies analyzed particular firms and lack statistical generalizations (Blanco et al., 2009). For example, Shrivastava (1995) explained the concept of environmental technologies, and the practical application of these technologies was illustrated using a mini case example of 3M Corporation. Hutchinson (1996) analyzed the integration of environmental policy with business strategy studying several firms (Procter and Gamble, Rank Xerox and The Cooperative Bank). Marcus and Geffen (1998) studied the processes by which distinctive competencies are acquired based on the case of pollution prevention in electric generation. Enz and Siguaw (1999)

examined four hotels that agreed that cost savings, operating efficiencies and excellent marketing opportunities derived from their environmental initiatives.