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It’s not easy being green
... (1) identificar el objetivo del indicador; (2) seleccionar las entradas y salidas del sistema a analizar; (3) elegir el periodo de análisis; (4) identificar y cuantificar las entradas y salidas relevantes y; (5) calcular el indicador. Pache (2017), menciona que a lo largo de la literatura se encuentran numerosos trabajos que establecen la relación existente entre el rendimiento económico y la actuación medioambiental, esto es, entre el desempeño medioambiental y el desempeño económico financiero (Jaggi & Freedman, 1992;Walley & Whitehead, 1994;Shrivastava, 1995;Hamilton, 1995, Cohen, Fenn y Naimon, 1995Feldman, Soyka & Ameer, 1997;Klassen & McLaughlin, 1996); que se reafirma por muchos investigadores en el siglo XXI (Wagner & Wehrmeyer, 2001;Murty & Kumar, 2003;Al-Tuwaijri et al., 2004;Elsayed & Paton, 2005 En el estudio de la relación entre el desempeño medioambiental y el desempeño económico financiero, en la teoría postulada por Porter (1991), se asevera que la contaminación generada por las empresas suele estar asociada al el uso inadecuado de los recursos productivos, escasa eficiencia en los factores de producción o con pérdidas energéticas. Los autores mencionan que las compañias deben reducir el impacto ambiental y obtener de ventajas competitivas por la disminución de la contaminación. ...
... En dicha teoría, conocida por muchos autores como la estrategia win-win o win-win-win, debido a que todos ganan: la empresa, el medio ambiente e incluso los competidores, la buena gestión de los recursos productivos genera beneficios económicos y medioambientales, reduciendo los costos medioambientales y de producción a largo plazo, lo cual llevaría asociado una mayor competitividad y atrayendo a nuevos clientes sensibilizados por la actuación responsable con el medio ambiente (Elkington, 1994;Walley & Whitehead, 1994;Florida, 1996;Sharma &Vredenburg, 1998;Majumdar & Marcus, 2001). Schaltegger & Synnestvedt, 2002), desarrollan dos hipótesis relacionadas a la influencia de las cuestiones ambientales en los costos y los ingresos de una empresa, primeramente señalando que hay una influencia directa en el éxito económico y, como segunda hipótesis los autores sostienen que el buen desempeño económico impulsa el rendimiento del medio ambiente, basandose en la creencia de que el buen desempeño ambiental y la calidad de un producto o servicio de una empresa se logra cuando se ha alcanzado un alto nivel de éxito económico. ...
En la presente investigación se confirma que las empresas que mejoran su desempeño medioambiental mejoran su desempeño económico, al recopilar, analizar e interpretar información de 2018 a 2022 de 19 de las 35 emisoras bursátiles que en abril de 2021 integraban el Índice S&P/BMV IPC de la Bolsa Mexicana de Valores, mediante el cálculo de la “fórmula de ecoeficiencia” y la obtención del índice de ecoeficiencia de las emisiones de CO2. Con ello, se pretende contribuir al desarrollo de un marco experimental de la Teoría de la Ecoeficiencia, mediante un estudio documental con los informes financieros y de sustenibilidad publicados por las mismas empresas.
... Maxime et al. (2006) recommend five steps for the development of eco-efficiency indicators: (1) identify the objective of the indicator; (2) select the inputs and outputs of the system to be analyzed; (3) choose the period of analysis; (4) identify and quantify relevant inputs and outputs and (5) Calculate the indicator. Pache (2017) mentions that throughout the literature there are numerous works that establish the relationship between economic performance and environmental action, that is, between environmental performance and economic financial performance (Jaggi y Freedman, 1992;Walley y Whitehead, 1994;Shrivastava, 1995;Hamilton, 1995, Cohen, Fenn y Naimon, 1995Feldman, Soyka y Ameer, 1997;Klassen y McLaughlin, 1996); que se reafirma por muchos investigadores en el siglo XXI (Wagner y Wehrmeyer, 2001;Murty y Kumar, 2003;Al-Tuwaijri et al., 2004;Elsayed y Paton, 2005; Aragón-Correa, Hurtado-Torres, Sharma y García-Morales, 2008; Molina-Azorín, Claver-Cortés, López-Gamero y Tarí, 2009; Menguc, Auh y Ozanne, 2010). ...
... In this theory, known by many authors as the win-win or win-win-win strategy, due to everyone wins: the company, the environment and even competitors, good management of productive resources generates economic and environmental benefits, reducing longterm environmental and production costs, which would lead to greater competitiveness and attracting new customers who are aware of environmental responsibility (Elkington, 1994;Walley and Whitehead, 1994;Florida, 1996;Sharma and Vredenburg, 1998;Majumdar and Marcus, 2001). Schaltegger & Synnestvedt, 2002), develop two hypotheses related to the influence of environmental issues on a company's costs and revenues, firstly pointing out that there is a direct influence on economic success and, as a second hypothesis, the authors maintain that good economic performance drives environmental performance, based on the belief that good environmental performance and the quality of a company's product or service is obtained when a high level of economic success has been achieved. ...
The doctoral thesis called "empirical evidence of the Eco-efficiency Theory about water consumption in Mexican companies" confirms that companies that improve their environmental performance improve their economic performance, by collecting, analyzing and interpreting information from 2018 to 2022 from the 35 stock companies that in April 2022 were part of the S&P/BMV IPC Index of the Mexican Stock Exchange, by calculating the "eco-efficiency formula" and obtaining eco-efficiency index of water consumption.
... Maxime et al. (2006), recomiendan cinco pasos para el desarrollo de indicadores de ecoeficiencia: (1) identificar el objetivo del indicador; (2) seleccionar las entradas y salidas del sistema a analizar; (3) elegir el periodo de análisis; (4) identificar y cuantificar las entradas y salidas relevantes y; (5) calcular el indicador. Pache (2017), menciona que a lo largo de la literatura se encuentran numerosos trabajos que establecen la relación existente entre el rendimiento económico y la actuación medioambiental, esto es, entre el desempeño medioambiental y el desempeño económico financiero (Jaggi y Freedman, 1992;Walley y Whitehead, 1994;Shrivastava, 1995;Hamilton, 1995, Cohen, Fenn y Naimon, 1995Feldman, Soyka y Ameer, 1997;Klassen y McLaughlin, 1996); que se reafirma por muchos investigadores en el siglo XXI (Wagner y Wehrmeyer, 2001;Murty y Kumar, 2003;Al-Tuwaijri et al., pág. 11847 2004;Elsayed y Paton, 2005; Aragón-Correa, Hurtado-Torres, Sharma y García-Morales, 2008; ...
... En dicha teoría, conocida por muchos autores como la estrategia win-win o win-win-win, debido a que todos ganan: la empresa, el medio ambiente e incluso los competidores, la buena gestión de los recursos productivos genera beneficios económicos y medioambientales, reduciendo los costos medioambientales y de producción a largo plazo, lo cual llevaría asociado una mayor competitividad y atrayendo a nuevos clientes sensibilizados por la actuación responsable con el medio ambiente (Elkington, 1994;Walley y Whitehead, 1994;Florida, 1996;Sharma y Vredenburg, 1998;Majumdar y Marcus, 2001). Schaltegger y Synnestvedt, 2002), desarrollan dos hipótesis relacionadas a la influencia de las cuestiones ambientales en los costos y los ingresos de una empresa, primeramente señalando que hay una influencia directa en el éxito económico y, como segunda hipótesis los autores sostienen que el buen desempeño económico impulsa el rendimiento del medio ambiente, basándose en la creencia de que el buen desempeño ambiental y la calidad de un producto o servicio de una empresa se logra cuando se ha alcanzado un alto nivel de éxito económico. ...
La presente investigación confirma que las empresas que mejoran su desempeño medioambiental mejoran su desempeño económico, al recopilar, analizar e interpretar información de 2018 a 2022 de 19 de las 35 emisoras bursátiles que en abril de 2021 integraban el Índice S&P/BMV IPC de la Bolsa Mexicana de Valores, mediante el cálculo de la “fórmula de ecoeficiencia” y la obtención del índice de ecoeficiencia del consumo de energía. Con ello, se pretende contribuir al desarrollo de un marco experimental de la Teoría de la Ecoeficiencia, mediante un estudio documental con los informes financieros y de sustenbilidad publicados por las mismas empresas.
... Investors want to know the environmental risks of the company's operations, as well as the company's sustainable development activities and environmental protection efforts (Sudibyo, 2018). Walley and Whitehead (1994) argued that a firm should not take only a valuebased approach that allows for an information exchange on environmental costs and benefits. ...
This study aims to examine the effect of carbon emissions disclosure on firm value in Indonesia using statistical analysis methods. This research uses panel data which consists of a combination of time series and cross section. A total of 1,830 data from 366 Indonesian companies were collected from annual reports and sustainability reports for an observation period from 2018 to 2022 as a sample of the research. Firm value is measured using Tobin’s Q. The results showed that the disclosure of carbon emissions had an effect on firm value. It was also figured out that a control variable, leverage, affected firm value. These results indicate that information about carbon emissions promotes firm value. The disclosure of carbon emissions by the company will affect investors’ decisions. This is consistent with the stakeholder theory, according to which investors have the right to obtain information about the company’s activities from annual reports and sustainability reports. Companies are encouraged to foster the initiative to disclose carbon emissions as an effort to reduce the threats of global warming and strengthen stakeholders’ trust in making investment decisions.
... GSCM initiatives might lead to tangible benefits such as cost reduction (Orlitzky et al., 2003;Melnyk et al., 2003;Eltayeb et al., 2011), improved quality (Melnyk et al., 2003, wastes reduction (Azevedo et al., 2011), reduction of lead times (Melnyk et al., 2003), improved profitability (Darnall et al., 2008;Menguc and Ozanne, 2005), positive stock returns (Klassen and McLaughlin, 1996;Menguc and Ozanne, 2005) and energy conservation (Cordano et al., 2010). GSCM practices may also lead to intangible benefits including: enhanced competitiveness (Rao, 2002;Rao and Holt, 2005), increased shareholders value (Bose and Pal, 2011), increased customer satisfaction (Azevedo et al., 2011), improved job satisfaction (Jun et al., 2006), enhanced efficiency (Azevedo et al., 2011) and new market opportunities (Diabat et al., 2013;Walley and Whitehead, 1994). Elkington (1994) introduced the concept of "triple bottom line", claiming that sustainability is nothing but the intersection of economic, environmental and social performance; however, this research adds another dimension that is operational performance. ...
This study examines the impacts of climate policy changes on business carbon performance in Australia as the country strives for climate neutrality. In this study, we analyse the carbon efficiency data of National Greenhouse and Energy Reporting (NGER) registrants—the largest emitters in Australia—from 2009 to 2020 to examine the carbon efficiency results of these top polluters against the significant climate policy changes over the decade, identifying patterns, challenges, and opportunities. The findings show that although over half of Australia’s top emitters improved their carbon efficiency, only a quarter were strong carbon-efficiency performers (i.e., improved both carbon and economic performance). Carbon efficiency developments were predominantly driven by economic performance, with few companies solely focusing on environmental performance (‘Green Stars’). However, companies also increasingly avoided being perceived as ‘dirty’ or as ‘Dirty Cash Cows’. Carbon performance improvement was more prominent among companies operating in less environmentally sensitive industries compared to highly sensitive industries. As economic performance rather than environmental improvement remained the main driver for carbon efficiency development, the carbon tax lowered carbon efficiency outcomes due to increased economic and compliance costs, while its repeal led to a slight improvement in carbon efficiency. However, the failure of the National Energy Guarantee and ongoing policy uncertainty regarding climate change significantly reduced carbon efficiency outcomes in more recent years.
This study utilizes both cross-sectional and year-by-year settings of Propensity Score Matching with Difference-in-Differences (PSM-DID) method to analyze the impact of the 2015 Environmental Protection Law (NEPL) on green innovations and total factor productivity in heavy polluting firms within manufacturing industries, spanning 2010–2018. Employing the Cobb-Douglas production function framework, it posits green innovation as a crucial technological resource augmenting tangible assets and technological productivity. The analysis reveals differentiated effects of NEPL on various types of green innovations: a negative impact on alternative energy and green transportation patents, while energy-saving and waste management patents remain largely unaffected. This suggests a crowding-out effect of environmental regulations on certain green innovations. Interestingly, heterogeneity analysis shows that smaller, less profitable heavy-polluting firms economically gain more from green innovations, particularly in waste management and energy-saving, while strict policies pose challenges for the alternative energy sector, highlighting the need for diverse, more supportive and adaptive policy approaches.
Effective closed-loop supply chain is one of the crucial element of organizational sustainable performance. This study aims to explore the factors that enhance the strategic reverse logistics competence of an organization and further the influence of such competence on the firms’ sustainable performance in the context of Pakistan’s business landscape. Pakistan is a developing country with fifth largest population facing severe challenges due to environmental degradation. At the same time manufacturing organizations are struggling to maintain and enhance their triple-bottom-line. The research design is deductive and includes a survey approach. Self-administered survey instrument was sent to multiple manufacturing firms in Pakistan resulting in the collection of useful data from 159 respondents. Structural equation modeling was applied for hypothesis testing. All hypotheses developed through the extensive literature review have shown a significant relationship. Results reflect that flexibility through logistics service providers, collaboration, and organizational commitment are crucial to build Reverse Logistics Competency (RLC). Moreover, RLC has a significant impact on the firm’s Triple Bottom Line. This research enhances the importance of strategic reverse logistics management and also indicates the enablers and components to develop Strategic Reverse Logistics Capabilities. This research provides some valuable insights for logistics managers working in the context of developing countries to effectively develop RLC and enhance organizational sustainable performance.
The effective and equitable governance of the environment is a critical subject that requires extensive research. It is essential to build an ecological environment conducive to improving people’s livelihoods. Emerging as a crucial driver of economic evolution, the digital economy significantly contributes to urban eco-efficiency improvements. In this study, fsQCA methods are applied to a sample of 275 cities in China, focusing on the interplay of six factors associated with the digital economy and environmental policies. The study investigates various factors and the complex causal mechanisms that influence production eco-efficiency simultaneously. (1) It is found that the driving mechanism to achieve high eco-efficiency can be divided into two paths: one is digital innovation-driven, and the other is digital-policy collaboration. (2) The elements in these groupings show characteristics of both substitutability and complementarity. Digital infrastructure and talent support effectively promote high eco-efficiency, which can be further enhanced by a digital innovation environment, industrial scale, and fiscal-type policy tools. (3) Fiscal-type policy tools serve as pivotal instruments in fostering the enhancement of eco-efficiency. To lower carbon emissions, local governments are encouraged to enhance policy support and funding while fostering innovative business models within the digital economy. (4) The study also reveals that ecological-type policy tools may produce opposite effects when combined with different conditions, indicating asymmetry in their application.
This study employs bibliometric methods to analyze 586 publications on green development from 1995 to 2022, drawn from 51 top journals in economics and management. The analysis integrates quantitative and qualitative approaches to reveal critical trends, contributors, and themes in the field. Findings indicate a notable increase in publications post-2005, establishing green development as a significant research topic. The top three influential journals identified are the Journal of Business Ethics, Research Policy, and Production and Operations Management. Author analysis reveals prominent researchers and collaboration networks, with notable contributions from institutions such as the Pennsylvania Commonwealth System of Higher Education and Laval University. The United States of America emerges as a leading contributor, with influential authors like Porter Michael Eugene, Hart Stuart L., and Bansal Pratima.
The manufacturing industry is a major contributor to the carbon emissions of China. Studying the changes in the profitability of manufacturing enterprises is conducive to observing the impacts and focuses that the "dual carbon" goal brings to manufacturing enterprises,thereby better facilitating the achievement of the "dual carbon" goal.This paper organizes a total of 18,329 sample data from 3,061 manufacturing enterprises in China.It shows that the"dual carbon"policy significantly improved the profitability of enterprises located in regions with well-established low-carbon pilot programs. Then, it’s also found that strategy has a positive effect on profitability for enterprises which belong to the eastern region, non-high polluting industries,or with high ownership concentration. Lastly,it’s also discovered that there is a mediating effect of "dual carbon"strategy which helps to better understand the impact mechanism of improving profitability for manufacturing enterprise under the pressure of regulation.
This study explores how social capital influences the relationship between waste generation and firm performance. Using data from 2973 non-financial firms across 50 countries from 2010 to 2020, we find that the adverse effects of waste generation on firm performance are more pronounced in countries with high social capital. Specifically, the interaction term between social capital and waste generation is significantly negative, suggesting that firms in these countries experience a greater decline in performance due to waste generation. Our results are robust across various estimation strategies, including Fama–MacBeth, pooled OLS, and panel regressions, and hold under different sample structures and proxies for waste generation. These findings underscore the critical role of social capital in moderating the environmental impact on firm performance, highlighting the need for stricter waste management regulations in countries with low social capital.
The aspiration to reach the net zero carbon target has initiated new ideas for the sustainable development of the world economy. However, it has also accelerated the formation of stranded assets in high-carbon-emitting companies. Taking a Chinese thermal power company as an example, this paper proposes a model to estimate the degree of impairment loss for thermal power companies by integrating the net present value model with forward-looking carbon emission pathways under different policy intervention scenarios. The results show that under the low-carbon transition scenario with different policy interventions, the percentage of impairment loss of thermal power companies reaches up to 64.09%. Furthermore, impairment losses formed by stranded assets in the thermal power sector impose a severe shock on the national economy, as most of the impairment losses will ultimately be borne by the state treasury. Compared with conventional thermal power generation, new-energy power generation has a weak performance in delaying company bankruptcy caused by stranded assets. Therefore, in the process of a low-carbon transition, governmental departments should focus on the impairment loss of thermal power companies caused by stranded assets and should further integrate “green support” and “brown punishment” policies to effectively promote the low-carbon transition of thermal power companies.
The aim of the research is twofold: to investigate the corporate sustainability profile of agri-food cooperatives and to analyze its impact on cooperative performance. This study attempts to fill a gap in the literature represented by the limited investigation of sustainability according to the integrated approach proposed by the Triple Bottom Line. This study applies the Structural Equation Modeling on data provided by the administration of a questionnaire to the managers of a sample of Italian cooperatives operating in the agri-food sector, selected among the members of the General Association of Italian Cooperatives. The results show that environmental, social and economic dimensions of sustainability are relevant to shape the cooperatives corporate sustainability, but they do not impact the agri-food cooperatives performance. Consequently, the cooperative's management should give more consideration to renewable energy practices and make sustainability practices positively influence the cooperative's performance through: increasing internal communication strategies, moving from competition to coopetition, developing skills to make sustainability a performance enhancing factor. Furthermore, cooperative management should improve the external communication strategies used to communicate the adopted sustainability practices, in order to make sure that the knowledge of the sustainability profile by the market leads to an increase in consumer loyalty.
Tanulmányunk célja a hazai kis- és középvállalkozások ESG-minősítésében bekövetkező változások elemzése. A vizsgálatban közel 1200 vállalkozás ESG-minősítésének változását követtük nyomon 2022. szeptember 19. és 2023. október 19. közötti időszakon. Az eredmények azt mutatják, hogy a pozitív ESG-változás területén a szakmai tudományos, műszaki tevékenység iparág, a negatív ESG-változás területén az építőipar dominál. A regionális szintű elemzések a fővárosban (+3,7%) és a dél-alföldi régióban (+4,2%) mutatnak jelentős ESG-javulást, míg a legnagyobb negatív változás az észak-alföldi régióban (-4,8%) figyelhető meg. A megyei szintű vizsgálatok szerint a legnagyobb pozitív változás Csongrád-Csanád (8,4%), Veszprém (4,4%), Vas (4%), a legnagyobb visszaesés Nógrád (-6,4%), Hajdú-Bihar (-5,4%) és Szabolcs-Szatmár-Bereg (-4,4%) megyékhez köthető.
This investigation is based on a quantitative method and approach from inferential statistics.
This study addresses urgent need for social equality and the desire for a sustainable business environment following emerging realities, climatic changes, and environmental issues based on a framework built on corporate social responsibility (CSR).
The primary data were acquired from respondents via questionnaire administration and interviews from a random poll performed in Rome.
The results of the hypothesis connecting brand image and social responsibility showed a high value of p = 1.000, exceeding the set critical limit of 0.05; thus, companies and organizations that support socially responsible practices are drivers and vanguards for promoting and entrenching social equality, trust, and mutual engagements with the stakeholders and societies from which they draw resources for their activities.
Finally, relevant and novel models have been presented that unravel and unveil the templates and working frame for achieving social equality and sustainability while addressing environmental issues associated with business activities, emphasizing value -based creation, social equality, and sustainable marketing on a precept and foundational framework of social responsibility and corporate identity, or ‘CSR’. This led to key recommendations crucial to the business environment, policymakers, stakeholders, and decision-makers in politics.
We investigate the impact of product market competition (PMC) on corporate waste generation and Recycling. Analysing a global sample of 42 countries from 2002-2020, we find a positive (negative) association between the PMC and corporate waste generation (Recycling). Our channel analysis reveals that PMC diminishes both a company's profitability and cash flow, leading to lower waste management (Recycling). In further analysis, we demonstrate that the positive effect of PMC on waste generation is more prominent in financially constrained firms. Our study provides novel evidence of the consequential impact of competition on sustainability initiatives and presents important policy implications for regulators.
In the context of environmental challenges and sustainable development, modern firms strive for competitive advantage through environmental innovations (EIs), yet the impact of EIs on firms’ performance remains a controversial topic in the scholarly discourse. While some authors highlight a positive influence, numerous studies reveal ambivalence or even negative effects on firms’ financial performance. This inconsistency highlights the insufficient exploration of various aspects of the financial implications of EIs. Recognizing the moderating role of firms’ size dynamics, often overlooked in existing studies, this research investigates how the changing size of firms influences the relationship between EIs and financial performance. Analyzing data from 1136 European and North American firms over the period 2012–2019, with and without green patents, the study reveals distinct correlation results between environmental innovations (EIs) and financial performance in a specific industry, differing in both the short and long run. Firms experiencing greater growth compared to industry growth tend to implement more EIs compared to their counterparts. Growing firms with EIs show superior long-term financial performance but experience poorer short-term financial results compared to their counterparts without EIs. Notably, as green firms age, the influence of firms’ size dynamics on the EI–financial performance relationship diminishes.
Exploring the influence of environmental taxes on ESG performance is crucial for fostering enterprise sustainability. This study presents an investigation of the influence of environmental taxation on corporate ESG performance by utilizing listed companies on the Chinese A-share market with notable pollution levels as the research sample from 2009 to 2021. Employing the two-way fixed effects model methodology, an empirical analysis is conducted. The results reveal the following: (1) Enforcing environmental taxes can bolster the ESG performance of enterprises, with a more pronounced effect observed in state-owned and large enterprises; (2) Environmental taxes contribute to improving a firm's ESG performance by fostering green innovation and attracting media attention; (3) The internal environment and equity balance of enterprises can amplify the positive impact of environmental taxes on enterprise ESG. These findings offer valuable insights into how corporate environmental taxes enhance ESG performance and foster sustainable development. Moreover, this study adds to the current body of ESG literature and provides valuable insights for government policymakers in adjusting environmental tax policies and corporate governance measures.
Green innovation entails the production assimilation or exploitation of unique methods of doing business that result in a decrease in environmental risks. Green innovation is a complex and multifaceted process, encompassing product, process, and organizational dimensions, each with unique factors influencing firm performance, business efficiency, and sustainable development. This research investigates the impact of eco-innovation on the financial performance of firms across 12 G7 and BRICS countries from 2013 to 2022. Considering 2100 listed firms, the study explores how process, product, and organizational eco-innovation dimensions affect business performance. Utilizing Feasible Generalized Least Square (FGLS) regression and System Generalized Method of Moments (GMM) models, the results indicate a positive impact of environmental innovation on firm performance. Further, in BRICS countries, process, and organizational eco-innovations have greater impacts, while in G7 countries, product eco-innovation gets precedence. The varying impacts reflect the unequal stages of development and priorities between the two groups. It also signifies that G7 countries possess more resources for green innovation, while BRICS countries are still evolving. The findings therefore underscore the importance of tailored regulations, monitoring, and support to facilitate the integration of eco-innovations into business processes. Moreover, there is a need for firms to adopt and execute green innovation-based economic activities that would make them financially efficient, and strengthen the growth imperatives of both the groups of countries. Collaboration between developed and emerging economies would go a long way fostering common goals across them.
For various reasons, carbon-intensive firms in emerging markets are constrained to pursue cross-border acquisitions. This paper examines domestic mergers and acquisitions (M&As) as a carbon-offsetting strategy among carbon-intensive firms in China. We find that high carbon-emitting firms are more likely to engage in domestic M&As. Stricter environmental regulations amplify this effect. Additionally, these firms display higher risk profiles, characterized by elevated betas, idiosyncratic risks, cashflow volatility, and accounting return volatility due to the substantial transition risks associated with pollution control expenses. These firms opt for M&A activities to mitigate these risks, acquiring low-pollution or green innovation-focused targets. M&A announcements result in higher returns performance than low-carbon risk acquirers, indicating the value-enhancing impact of decarbonizing M&As. State-owned enterprises, financially stable firms, and those with stronger corporate governance tend to engage in M&A deals to address carbon risk.
With mounting concerns about sustainability, significant attention has been directed toward research within the green industry domain. However, existing literature on initial public offerings (IPOs) has overlooked a crucial distinction: investors do not perceive all firms operating in green industries equally. Firms with green business models (GBMs) are more attractive to investors by providing positive signals of future growth potential and sustainability. To reveal this, the study investigates the relationship between GBMs and IPO success by Ordinary Least Squares (OLS) regression analysis. As the Asia-Pacific IPO market accounts for about 60% of IPO volume and value, with Korea actively participating in this global surge, the study used a sample of 150 firms that underwent IPOs between 2016 and 2019 on the Korea Securities Dealers Automated Quotations (KOSDAQ) market. We find evidence that firms with GBMs are more likely to achieve successful IPO outcomes, and GMC also plays a positive moderating role, enhancing the positive link between GBMs and IPO success. However, GMC alone had no significant effect. These findings imply that green signals positively contribute to a successful IPO and that each green signal can have different signaling effects, ultimately contributing to the field of sustainability through signaling theory.
This research explores the use of machine learning to predict alpha in constructing portfolios, leveraging a broad array of environmental, social, and governance (ESG) factors within the S&P 500 index. Existing literature bases analyses on synthetic indicators, this work proposes an analytical deep dive based on a dataset containing the sub-indicators that give rise to the aforementioned synthetic indices. Since such dimensionality of variables requires specific processing, we deemed it necessary to use a machine learning algorithm, allowing us to study, with strong specificity, two types of relationships: the interaction between individual ESG variables and their effect on corporate performance.The results clearly show that ESG factors have a significant relationship with company performance. These findings emphasise the importance of integrating ESG indicators into quantitative investment strategies using Machine Learning methodologies.
Utilizing comprehensive firm-level data from 2005 to 2021 across various African nations, our study investigates the effect of a firm’s greenhouse gas (GHG) emissions on its corporate financial performance (CFP). The research yields the following findings. First, we find that GHG emission intensity exerts a significantly negative impact on CFP measured by return on assets (ROA) and return on equity (ROE). This effect is consistently substantiated across different measurements of GHG emission intensity and CFP. Second, our analysis includes a series of stringent robustness assessments, all of which affirm the stability and resilience of our primary findings. Third, following the Paris Agreement, a decrease in GHG emission intensity correlates with a further rise in ROA and ROE. Additionally, we emphasize the pivotal role of industry-specific characteristics and regional variables in shaping the connection between GHG emission intensity and CFP. Our findings underscore that the influence of GHG intensity on a firm’s financial performance is particularly pronounced within high-emission sectors in contrast to their low-emission counterparts. Furthermore, we show that the impacts of GHG emission intensity on CFP are primarily driven by firms operating in Southern Africa. Fourth, to recognize potential endogeneity concerns within the GHG emission-CFP relationship, we employ a two-stage least-squares regression (2SLS) approach. This method utilizes industry-level GHG emission intensity as the principal instrumental variable (IV), and in order to further mitigate endogeneity issues, we incorporate both lagged GHG intensity and the instrument proposed by Lewbel (2012) based on heteroskedasticity as additional IVs alongside the kinky least squares (KLS) method by Kiviet (2020). The results derived from our 2SLS estimates consistently corroborate the negative effect of GHG emission intensity on CFP. Finally, our empirical findings carry significant implications for both corporations and policymakers.
The purpose of this paper is to analyze the impact of environmental regulation on innovation and international competitiveness. We test the weak, narrow, and strong versions of Porter's hypotheses by looking at the impact of environmental regulation on exports both directly and indirectly through innovation and by introducing the role of pollution intensity in moderating the impact of stringent regulation on innovation and international competitiveness. Green policies are measured with the OECD Environmental Stringency Policy Index, distinguishing between market, non-market instruments, and technology support policies. Differently from previous papers, we adopt the technology gap approach to trade, which is suitable for relating environmental regulation to trade competitiveness and we apply the simultaneous-equation system econometric model with a moderating factor represented by pollution intensity. The results support the weak and strong versions of Porter’s hypotheses and find that the positive impact of regulation on innovation and exports increases with a country’s pollution intensity, suggesting that green policies, if properly coordinated, can represent a win–win strategy, fostering, at the same time, sustainability and international competitiveness.
As increasingly stringent environmental regulations are put into effect, Environmental, Social, and Governance (ESG) concepts are being seamlessly integrated into the core of corporate innovation strategies. Due to the quasi-public product perspective of green innovation, the performance of enterprises as a result of green innovation activities exhibits significant heterogeneity. This heterogeneity exists not only between corporate value and financial performance but also among individual enterprises. This paper is based on a sample of 1510 listed Chinese companies examined from 2013 to 2020 and uses machine learning algorithms and quasi-natural experiments to precisely estimate the causal relationship and mechanisms between green innovation and corporate performance. The findings elucidate several critical aspects of green innovation within the corporate sphere: Firstly, rather than attracting green incentives from financial markets, green innovation activities inadvertently stifle the enhancement of corporate value. Secondly, these activities markedly bolster corporate financial performance, primarily by diminishing operational costs, which in turn elevates the return on assets (ROA). Lastly, of all corporate characteristics examined, enterprise size and equity concentration stand out as key determinants influencing the variability in outcomes of green innovation performance. The above findings provide information on the significant implications of enhancing green technology innovation systems and green incentive mechanisms.
This paper examines the linear effects of economic growth on carbon emissions and their impact on mortality and morbidity rates in specific regions sub-Sahara Africa, Middle-East and North Africa, Europe and Central Asia (SSA, MENA, ECA). By analyzing longitudinal data for 82 panels over 30 years, we investigate the relationships between energy usage, per capita GDP, life expectancy, and carbon emissions. Our estimation results show positive correlations between energy use, carbon production, and life expectancy in both the combined sample and individual regions. However, death rate has a negative relationship with carbon production in the combined sample, MENA, and SSA regions. Per capita GDP positively influences carbon emissions and life expectancy in the combined sample and ECA, MENA, and SSA regions. We also identify asymmetric relationships between per capita GDP and carbon production, with evidence supporting the Environmental Kuznets Curve hypothesis for the combined and ECA samples, and an N-trajectory for SSA. These findings emphasize the importance of region-specific approaches to sustainable development, considering the unique environmental and economic challenges each region faces. Policymakers should consider our research insights when designing policies to mitigate the negative impacts of economic progress on the environment.
In recent years, experts and academics in the environmental management field have developed an interest in the factors and evaluation techniques that influence corporate environmental investment decisions. However, there are substantial differences between studies employing the most recent evaluation methodologies and those that use indicator systems. To explore the mechanisms that influence corporate environmental investment, this study investigated the determinants of environmental investment through the perspectives of firm, board, chair, and chief executive officer (CEO) characteristics using a machine learning approach. Based on a large-scale data sample from Chinese-listed companies, the results indicated that the extreme gradient boosting (XGBoost) model had an accuracy of up to 97.63%, thus performing the best. Additionally, the model that used SHapley Additive exPlanations (SHAP) to interpret XGBoost showed that a company’s sales performance was the most important factor that influenced environmental investment, followed by CEO tenure, board independence, board gender diversity, chair academic experience, and the company’s level of internationalization. Furthermore, when examining the sample of heavily polluting enterprises, sales, board gender diversity, CEO tenure, chair academic experience, board inde- pendence, and chair–CEO duality, all were found to play crucial roles in predicting environmental investment. Overall, this study aids in evaluating the factors that influence corporate environmental investment decisions and provides policymakers and practitioners with a machine learning approach for use when assessing these factors.
China has become the world’s largest carbon emitter due to its high-investment, low-efficiency development model. It is urgent to reduce industrial pollution emissions. This study analyzes the impact of environmental regulation intensity and energy consumption structure on industrial SO2 pollution emissions by establishing a fixed-effect regression model based on panel data from 2009 to 2018 in China. The results show that the overall environmental regulation intensity in China has a significant negative effect on industrial pollution emissions. In other words, increasing the level of environmental regulation is conducive to reducing industrial pollution emissions. The proportion of coal consumption in the overall national energy consumption structure directly and positively correlated with the concentration of industrial pollution emissions. Due to the differences in economic development and industrial foundation, the pollution emissions effect shows significant heterogeneity in the eastern and western regions of China under the constraint of environmental regulation. Based on these conclusions, this article proposes policy recommendations from four aspects: (1) strengthen environmental regulation, and pay attention to optimize the form of environmental regulation. For example, in the West of China, the government can encourage enterprises to carry out technological innovation and develop green energy hubs by policy and financial support; (2)improve the energy consumption structure, such as encouraging green production; (3) promote industrial structure adjustment and upgrading, such as promoting the energy saving transformation of energy-intensive enterprises, developing green technologies, and reducing the carbon emissions of industrial industries; (4)improve the foreign investment access system and guiding foreign investment to invest in key environmental protection projects.
Due to consistent surge strength in the form of legislations as well as a part of corporate social responsibility, companies in emerging economies like India need to synchronize. This is possible by implementing the concept of social sustainability in supply chain business activities. This paper investigated key factors influencing the adoption of social sustainability in supply chain activities of Indian manufacturing sector as a social development perspective. The present study covered literature review on sustainable supply chain covering social perspectives as well-chosen Indian manufacturing companies to investigate social perspectives. Social sustainability issues among Indian manufacturing companies using a structured questionnaire were investigated. Using the convenience sampling, 155 responses were collected as part of data collection and performed factor analysis, analysis of variance (ANOVA), and correlation to investigate and accomplish the research objectives. This paper investigated and found the following factors influencing the enactment of social sustainability in supply chain activities of Indian manufacturing sector as a social development perspective: community, safety, product responsibility, sustainable business opportunities. This study also investigated the relationship among different identified social sustainability practices in supply chain activities of manufacturing companies. The author has also proposed “house of social sustainable supply chain management practices” for Indian manufacturing sector. This paper proposed social sustainable factors to be implemented across the supply chain of the Indian manufacturing sector as it has been strong, pragmatic, and pertinent and can be conformed to by the organization with minimal changes in their prevailing work structure.
Using a unique sample of 13,412 firm-year observations from 19 countries of the emerging economies for the period of 2011 to 2019, we investigate the association between the firms’ environmental, social, and governance (ESG) performance and their value creation in the product market. Specifically, we first used the pooled OLS regression model for panel data as our baseline model and found that ESG performance (as well as its pillars) has a strong positive effect on the future value creation of the firms in the product market. We also conducted some additional analyses using various regression models, as well as adopting multiple tests for endogeneity, and the additional analyses revealed that the results are robust under different scenarios. Overall, the findings of this study highlight the importance of firm-level ESG performance for the value creation of firms in the product market in emerging economies and have theoretical and practical implications for academic researchers, market participants, and government entities in studying, evaluating, and governing firms’ ESG performance and reporting.
This study takes a managerial cognition perspective and investigates how managerial negative interpretation of the external environment influences firm engagement in environmental CSR. We also explore how ownership structure and market demand uncertainty affect this relationship. The analysis of survey data from 189 firms in China shows that when managers interpret their external environment in a negative light, they first increase their attention to firms’ environmental footprint and then decrease their environmental commitment as the assessment of the external environment becomes increasingly negative. Our results also suggest that both state ownership and market uncertainty strengthen this curvilinear relationship.
This study examines the influence of environmental commitment (EC) on Tunisian firms’ export intensity and utilising the resource-based view (RBV) framework. Using firm-level data from the 2020 World Bank Enterprise Survey (WBES), it explores the direct and indirect effects of EC on export intensity through product and process innovation. The findings highlight that EC plays a crucial role in fostering both product and process innovation, underscoring its strategic significance in driving overall innovation within firms. Additionally, EC and product innovation are identified as key factors positively contributing to exports, emphasising the importance of a strong EC orientation and a focus on product innovation for enhancing export activities. Notably, the presence of quality certification influences the relationship between EC and process innovation, weakening the impact of EC in that context. This finding underscores the nuanced dynamics between EC, process innovation, and quality certification. Overall, this study highlights EC as a strategic approach for enhancing firm innovation and promoting export orientation, providing empirical evidence and insights derived from the specific context of Tunisia. Embracing EC and aligning it with innovation and export strategies enables firms and policymakers to foster sustainable growth, enhance competitiveness, and contribute to a greener and more inclusive future.
Prior literature documents that in developed economies, tighter environmental standards may induce higher firm innovations. In contrast, using China’s firm-level CO2 emissions data, this paper finds that firms with higher CO2emissions are associated with lower corporate innovation. A 1% increase in carbon emissions reduces research and development (R&D) expenditures by about 4.3% to 6.3%, having controlled for endogeneity concerns. While technical and commercial uncertainty of innovation can deter high carbon-emitting firms from investing in R&D,we find that high carbon-emitting firms are financially constrained when faced with exorbitant pollution-related expenses. Instead, such firms acquire firms with green assets and purchase low-polluting target assets to mitigate environmental pollution. The results are more pronounced in firms with poor corporate governance, resourceconstrained non-SOEs, and highly polluting firms. Our results remain robust for different measures of R&D expenditures, green R&D and different components of carbon emissions.
This paper investigated the effects of carbon emissions and board gender diversity on firm performance using quantile regression. This approach explores the heterogeneity of the effect of carbon emissions on the performance of firms and overcomes some of the drawbacks of OLS regression. This research aimed to identify whether carbon emissions significantly impact firm performance using accounting- and market-based performance measures and how this impact varies according to a company’s size. Another objective was to determine how females on a board of directors could impact such a relationship. The data used were a sample of 1382 companies in emerging markets from 2008 to 2021. The findings show that carbon emissions negatively affect small-size companies consisting of both high-performing and low-performing companies; however, as the size of the companies increases, the effect of carbon emissions becomes positive regardless of whether they are high- or low-performing companies. The presence of females on a board has a minimally significant negative effect on a firm’s performance, irrespective of whether it is conditioned on size. This research contributes to the literature on the impact of carbon emissions on company performance, both conditional and unconditional on size. Furthermore, the results show that the relationship between carbon emissions and performance depends on size, as revealed using the novel econometrics model developed in this study. This study also shows the importance of the presence of females on a board of directors.
In this paper, we explore the nexus between extra-financial performance (sustainable ESG) and firm performance within a sample of American firms from different vital sectors. In particular, we examine whether extra-financial performance has an effect on company performance. To this end, we have used a non-linear model. The study is based on a sample of 93 American companies over the period 2010–2019. We find that the association between extra-financial performance and firms’ financial performance is nonlinear, exhibiting an inverted U-shaped pattern. In particular, the results emphasize the importance of caution when pursuing ESG initiatives. Enterprise managers should monitor the effect of ESG activities on extra-financial performance and confirm the ESG threshold of their organization.
Coordinated efforts to reduce haze and carbon emissions are important in promoting global climate governance and sustainable development. In this paper, based on prefecture-level data of China from 2005 to 2019, we investigate the impact of environmental regulatory intensity on the emissions of the concentration of PM2.5 and carbon dioxide (CO2). The research indicates that environmental regulation facilitates synergistic governance for PM2.5 reduction and carbon mitigation. Green technological advancement emerges as the primary mechanism through which environmental regulation achieves haze reduction and carbon mitigation. This conclusion remains robust after a series of robustness tests. Furthermore, the results from quantile regression reveal that the haze reduction and carbon mitigation effects of environmental regulation are subject to certain conditional dependencies. Environmental regulation exhibits a significant negative impact on carbon emissions across various quantile points. However, their influence on different quantile levels of PM2.5 concentration displays an asymmetric pattern. Finally, threshold regression findings suggest that there is no significant threshold effect of environmental regulation on CO2 emissions, but there are dual threshold effects on the PM2.5 concentration. Therefore, it is recommended that local governments judiciously implement environmental regulatory intensity, establish interregional policies for haze reduction and carbon mitigation, and fully harness the driving force of green technology to promote a comprehensive green transformation of economic and social development.
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