Environmental Performance, Environmental Risk and Risk Management

Dobler, Michael; Lajili, Kaouthar; Zéghal, Daniel

doi:10.1002/bse.1754

Cited by 79 publications

(71 citation statements)

References 85 publications

(130 reference statements)

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“…In the survey conducted by KPMG, carbon-related risks are the most reported sustainability issues [5]. Furthermore, Dobler et al [58] were among the first to investigate the relationship between environmental performance, environmental risk, and risk management. They found a negative relationship between environmental performance and environmental risk.…”

Section: Sustainability Risk Assessment and Disclosurementioning

confidence: 99%

Sustainability and Risk Disclosure: An Exploratory Study on Sustainability Reports

2017

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Recent policy changes in sustainability reporting, such as the ones related to the new European Directive on non-financial disclosure (2014/95/EU), the standards issued by the American Sustainability Accounting Standard Board (SASB), the G4 guidelines issued by the Global Sustainability Standard Board (GSSB), and the framework of the International Integrated Reporting Council (IIRC) stress the importance of extending the disclosure of ethical, social, and environmental risks within financial and social-environmental reporting. Institutional pressure has notably increased among organizations, in setting up risk management tools to understand sustainability risks within managerial and reporting practices. Given such institutional pressure, the corporate reaction in providing additional sustainability risk disclosure calls for attention and scrutiny. Therefore, this study aims at addressing such issues from an exploratory perspective. We based our analysis on a sample of large Italian organizations that issued sustainability disclosure in accordance with the Global Reporting Initiative (GRI), G4 guidelines, and we tested the relationship between their level of risk disclosure and other relevant variables. Consistently with the literature, we found that "experienced" sustainable reporters provide a significant volume of disclosure, and that disclosure quality on risk is positively influenced by their international presence and reporting experience. However, when accounting for specific risk-related areas of disclosure, only a few of them seem to adopt a managerial perspective linking strategy, risk metrics, and disclosure.

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Section: Sustainability Risk Assessment and Disclosurementioning

confidence: 99%

Sustainability and Risk Disclosure: An Exploratory Study on Sustainability Reports

2017

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“…ROA and LEV controls for the association among financial performance, environmental performance and propensity (Simon, 2010;Iwata & Okada, 2011;Lioui & Sharma, 2012). SIZE controls for firm size, environmental responsibility, pollution propensity and related environmental visibility of listed firms (Walls, Berrone & Phan, 2012;Dobler, Lajili & Zéghal, 2014). …”

Section: Wherementioning

confidence: 99%

The effect of environmental performance and preference disclosure on financial performance: Empirical evidence from unbalanced panel data of heavy-pollution industries in China

Chang

2015

JIEM

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Abstract:Purpose: Environmental performance and propensity disclosure is important for stakeholders to estimate firms' incentives in environmental management practices. The purpose of this article is to explore the impacts of environmental performance and propensity disclosure on financial performance using unbalanced panel data of eight heavy-pollution industries in China.Design/methodology/approach: Environmental performance and propensity exhibits mutual causality relationship with Tobin's Q value using unit root and co-integration test of panel data. Using panel data analysis, we take the impacts of environmental performance and propensity disclosure on financial performance from 2008 to 2012. Findings:Environmental performance has a significantly negative impact on Tobin's Q value at the significance levels of 1%, while environmental propensity has a significantly positive effect on Tobin's Q value at the significance levels of 5%. Firm size, financial leverage and return of assets have significantly positive impacts on financial performance at the significance levels of 1%. Meanwhile the effect of corporate environmental performance and propensity on financial performance has a significantly periodic difference from 2008 to 2012. Research limitations/implications:Those results are helpful for environmental regulators to evaluate the implementing effect of voluntary environmental policy and for firms' managers to increase market expectation and improve financial performance.-21-Journal of Industrial Engineering and Management -http://dx

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“…In turn, investors are requiring better quantitative assessments of how firms are managing climate and environmental risks and mitigating any potential damages [10][11][12][13][14][15][16]. Greater transparency concerning firms' climate risk management and performance will, therefore, increase the willingness of investors to provide long-term financing of such firms, as well as increase the rate of return on such investments [12,[18][19][20][21][22].…”

Section: Climate Risks and Firm Debtmentioning

confidence: 99%

“…Improved climate risk management and performance signal to financial investors that firms can sustain higher debt capacity, require less expensive debt, and warrant lower equity risk premiums. In turn, investors are requiring better quantitative assessments of how firms are managing the climate risks, mitigating the damages that arise from climate change, and incorporating these assessments in their long-term investment decisions [12,[18][19][20][21][22]. For example, 75% of 36 surveyed global financial institutions state that they monitor climate and environmental risks of transactions, and 42% account explicitly for such risks in their credit assessments [22].…”

Section: Introductionmentioning

confidence: 99%

Innovative Corporate Initiatives to Reduce Climate Risk: Lessons from East Asia

Barbier

Burgess

2017

Sustainability

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Businesses, investors, and insurers are requiring better quantitative assessments of their exposure to climate risks and their impact on climate change. They are incorporating these assessments in their day-to-day management and long-term investment decisions. Already, there are efforts to develop international guidelines, common policies and legal frameworks for such assessments, as well as the desire to foster climate financing. We examine recent progress in East Asia and the rest of the world in setting targets, pricing policies, and other mechanisms to reduce climate risks. We develop a model that demonstrates how reduced climate risk management may lower the total cost of capital of firms, thus making them more attractive to investors. We discuss the additional policies needed to support improved climate risk management in investment decisions, private investments in climate science, technology and innovation (STI) expansion, and more widespread adoption of climate financing and principles. Central banks, financial authorities, and governments can advance this objective by creating financial incentives to support investment decision-making. This would take into account factors such as improving climate performance, establishing better climate risk management and reporting requirements to foster green STI, and developing international guidelines and common policy and legal frameworks to support better climate risk management, assessments and reporting.

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Environmental Performance, Environmental Risk and Risk Management

Cited by 79 publications

References 85 publications

Sustainability and Risk Disclosure: An Exploratory Study on Sustainability Reports

Sustainability and Risk Disclosure: An Exploratory Study on Sustainability Reports

The effect of environmental performance and preference disclosure on financial performance: Empirical evidence from unbalanced panel data of heavy-pollution industries in China

Innovative Corporate Initiatives to Reduce Climate Risk: Lessons from East Asia

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