Between saying and doing, in the end there is the cost of capital: Evidence from the energy sector

Abstract

One of the crucial challenges in energy management is the conversion to sustainable operations. The present work is an attempt to verify whether financial institutions are able to identify and valorize those energy companies that have embarked on a virtuous process of emissions reduction. The analysis aims to verify the extent to which environmental disclosure measures are negatively associated with the cost of debt, focusing on a sample of international energy enterprises, observed over a time span from 2003 to 2016. Moreover, it tests whether measures relating to the emission of GHG are positively associated with the cost of debt. The empirical analysis is

Revisiting the influence of corporate sustainability practices on corporate financial performance: An evidence from the global energy sector

“…The energy sector is the bedrock of all global economic operations, but it is also one of the most significant contributors to carbon emissions (EIA, 2021). The increasing rate of energy production accounts for one third of total global carbon emissions (Morrone et al, 2022). As a result, many stakeholders, including environmental and social activists, investors, shareholders, and policymakers, focus on the sector's adverse effects on carbon emissions to ensure sustainable development (Florini & Saleem, 2011).…”

“…Others asserted that it plays a crucial role in alleviating corruption (Lu, Ren, Yao, et al, 2019). Further, Morrone et al (2022) argued that energy firms utilize disclosure strategies to communicate their sustainability practices, lowering environmental risk and enhancing production.…”

“…The energy sector is the bedrock of all global economic operations, but it is also one of the most significant contributors to carbon emissions (EIA, 2021). The increasing rate of energy production accounts for one third of total global carbon emissions (Morrone et al, 2022).…”

“…The global energy sector is highly vulnerable and accounts for emitting one third of total pollutants. The increase in demand for energy is expected to increase by 50% in 2050 (Environmental Investigation Agency [EIA], 2021); therefore, sustainability practices must be implemented in the energy sector, which will assist in mitigating the negative effects as well as protect the environment and its resources (Morrone et al, 2022). Also, to improve the clarity and focus on CSPR, the Global Reporting Initiative (GRI) framework has designed sector‐specific standards to identify the various sectors' impact on sustainability reporting (Global Reporting Initiative [GRI], 2019).…”

The relevance of non‐financial disclosure in influencing the cost of capital: Empirical evidence from the agri‐food sector

“…The sample was selected by looking for the most representative firms in the sector in terms of size and capitalisation. Following previous studies (Bernardi & Stark, 2018;Dunne & McBrayer, 2019;Eliwa et al, 2019;Ioannou & Serafeim, 2012, 2017Manta et al, 2020;Morrone et al, 2021;Raimo et al, 2020), the Bloomberg Professional database was used to retrieve data and to understand those actions appreciated by markets.…”