Does Going Green Pay Off? Examining the Effect of Eco-Certifications on Sales

The proliferation of eco-certifications, which endorse the sustainability of products and services, raises a key question: Does the award of an eco-certificate provide a competitive advantage and positively affect firm performance (i.e., sales)? Previous studies have focused on consumer attitudes and intended behaviours but not actual purchasing decisions. This research addresses this gap, employing a quasi-experimental design and observational sales data (2012-2018, n=55,485) from two similar hotels – one which received an eco-certificate in 2015 (Hotel A) and another which didn't (Hotel B). A difference-in-differences estimator was used to analyse the data, with other robustness checks applied to tackle potential selection bias. The findings show that post-eco-certification, hotel A's sales increased by 43.96% more than Hotel B's. This positive effect was observed in the fourth year after acquiring an eco-certification. This study has significant implications in the sustainability domain, highlighting the potential benefits of eco-certifications and bridging the sustainable consumption attitude-behaviour gap.