Assessing the economic impacts of forest certification in Spain: a longitudinal study

Forest certification has become a strategic instrument for businesses, particularly for accessing sensitive environmental markets and within sustainability commitments. This trend is also visible in Spain, where PEFC (Program for the Endorsement of Forest Certification) certification has increased by 91% in the past five years. However, there is a weak understanding of the certification impacts at the level of companies, especially when it comes to economic impacts. This study applies a longitudinal methodology to measure financial performance before and after obtaining PEFC-certification in Spain by analysing treatment and selection effects. The results show significant differences in economic profitability and turnover between certified and non-certified companies prior to certification. However, these differences are not significant in subsequent periods. Therefore, we could not confirm a treatment effect between forest certification and improved financial performance. Instead, we find a positive selection effect: companies with better financial performance have a greater propensity for certification, as has been previously detected for standards such as ISO 9001/14001. Compared to previous studies that predominantly assess economic impacts qualitatively, we use economic-financial data to avoid possible distortion emerging from perceptions and opinions. The main contribution of this study lies in the quantitative assessment of the impacts of forest certification on economic profitability and turnover.