Environmental and financial performance. Is there a win-win or a win-loss situation? Evidence from the Greek manufacturing

Abstract

This study examines the causal linkage between environmental and financial performance in Greek manufacturing firms. Environmental performance is measured according to accounting data following the Eco Management and Auditing Scheme guidelines and ISO certification. Return on assets and return on sales are used as indicators of financial performance. Empirical findings suggest that there seems to be a link between these dimensions irrespectively of the particular sector of activity. Contrary to similar studies a "virtuous circle" does not exist as the avoidance of environmental improving investments is related to a better financial performance. On the other hand firms with superior financial performance seem to achieve a better environmental performance. At the same time firm specific and market characteristics significantly affect this relationship. These findings provide evidence that governmental and corporate actions are necessary in order to lead to a more sustainable corporate performance in the long run.

Banks' environmental policy and business outcomes: The role of competition

“…Furthermore, Alexopoulos et al (2018) examined the relationship between environmental and financial performance in Greek manufacturing. Their empirical findings suggest that there seems to be a link between these dimensions, irrespective of the particular sector of activity.…”

“…The first group of researchers (Fang, Lau, Lu, Tan, & Zhang, 2019; Maudos & Fernández de Guevara, 2004; Tan, 2017; Tan, Floros, & Anchor, 2017; among others) examined the relationship between competition and banking performance. Whereas the second set of researchers (Alexopoulos, Kounetas, & Tzelepis, 2018; Cornett, Erhemjamts, & Tehranian, 2016; Nizam et al, 2019; Fatemi, Glaum, & Kaiser, 2018; Ferrero‐Ferrero, Fernández‐Izquierdo, & Muñoz‐Torres, 2016; Finger, Gavious, & Manos, 2018; Horváthová, 2010; Manrique & Martí‐Ballester, 2017; Shen, Ma, Wang, Pan, & Meng, 2019; and others) investigated the impacts of ESG on banking performance. Even though the above studies examined the relationship between competition and performance or environmental practices and performance, these researchers failed to integrate the impact of competition and environmental practices on banking performance.…”

Sustainable development and economic performance: Gaps and trends for future research

“…Although eco‐efficiency indicators were employed as a new set of variables, the authors could not find any relationship whatsoever. The environmental aspect was once again used by Dobre, Stanila, and Brad () who employed a panel fixed model to determine whether there was a relationship between environmental, social, and financial performances; Pandey and Kumar () who analyzed the connection between environmental cost and a firm's profit earning ability; Cheon, Maltz, and Dooley () who used the top 10 U.S. ports as their sample; Alexopoulos, Kounetas, and Tzelepis () who analyzed the relationship regarding Greek manufacturing companies; Gatimbu, Ogada, Budambula, and Kariuki () who analyzed the relationship between environmental efficiency and profitability in small‐scale tea processors in Kenya; Ganda and Milondzo () who analyzed the impact of carbon emissions on financial performance; and Shin, Ellinger, Nolan, DeCoster, and Lane () who examined whether employing renewable could have a relationship with firm performance.…”

“…Ten studies either could not find enough evidence to determine the existence of such relationship (Ching et al, 2017;Lean & Nguyen, 2014;Santis et al, 2016;Siew et al, 2013) or found mixed results when comparing different sectors (Ameer & Othman, 2012;Mervelskemper et al, 2013;Cristófalo et al, 2016;Lassala et al, 2017;Charlo et al, 2015;Chang & Kuo, 2008;. Seven authors found negative relationships between the variables (Alexopoulos et al, 2018;Gatimbu et al, 2018;López et al, 2007;Oh et al, 2017;Sariannidis et al, 2012;Tan et al, 2017;Vergini et al, 2015).…”

The impact of the amount of environmental information disclosure on financial performance: The moderating effect of corporate internationalization

“…For example, Zhu and Qiao (2008) argued that companies' level of profitability and level of financial leverage do not motivate companies to voluntarily disclose environmental information. Alexopoulos, Kounetas, and Tzelepis (2018) showed that improving production methods can improve environmental performance but does not always improve future financial conditions.…”