Examining the effect of managing GHG emissions on business performance

Abstract

Unprecedented climate changes menace not only the planetary ecosystem, but also the stability of the global economy. The European Union has for years promoted the transition of the economy towards a model of sustainable development, stimulating companies to adopt a strategic approach based on quality and environmental efficiency, rather than on quantity and reduction of costs. The aim of this study is to analyze how greater attention to the environmental effects of a company's activities (environmental management) and monitoring and reduction of CO2 emissions (emission management) can improve the company's economic performance. We analyze the financial data and greenhouse gas (GHG) emission figures for a sample of large Italian companies, searching for potential relations between increasing returns on capital invested and the reduction of pollutants. The results show that the companies examined are ever more attentive to environmental policies, and that those with a green vision achieve better operating performance. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment

Decomposition analysis of corporate carbon dioxide and greenhouse gas emissions in Japan: Integrating corporate environmental and financial performances

“…Following the growing awareness of climate‐change issues, the discussion of CSP has been shifting to CEP in recent years, for instance CO 2 /GHG emissions performance (for discussion, see Busch & Hoffmann, ). Recent empirical studies have examined the relationship between CEP of CO 2 /GHG emissions (and its management efforts) and CFP, which often includes ROA, ROE, ROI, and ROS (as profitability), and Tobin's q (Busch & Hoffmann, ; Capece et al, ; Delmas, Nairn‐Birch, & Lim, ; Fujii et al, ; Hatakeda et al, ; Nishitani et al, ; Wang, Li, & Gao, ).…”

“…While these four studies (Busch & Hoffmann, ; Fujii et al, ; Hatakeda et al, ; Wang, Li, & Gao, ) use common ad‐hoc regression models, Nishitani et al () and Capece et al () derive regression models based on the Cobb–Douglas production function, examining whether corporate management of CO 2 /GHG emissions affects CFP. Nishitani et al () examine whether the degree of GHG emissions management (CO 2 management score, CO 2 emissions score, and CO 2 reduction score) affects CFP (net sales over the cost of raw materials), using data of 423 Japanese manufacturing firms between 2007 and 2008.…”

“…Results show that GHG emissions management enhances CFP through an increase in demand and improvement in productivity (except for energy‐intensive firms). Meanwhile, Capece et al () empirically show that the adoption of an environmental management system and CO 2 emissions management enhance ROI, using data from 237 Italian companies from 2008 to 2013. However, this enhancing effect varies among sectors, and they found the positive effect in six sectors (paper, non‐metal minerals, food, textiles, chemical, and other activities), and the negative effect in two sectors (energy and metals).…”

“…Recent empirical studies mainly support the positive relationship between corporate performance in terms of CO 2 /GHG emissions (that is, their amount) and CFP, such as return on assets (ROA), return on equity (ROE), return on investment (ROI), return on sales (ROS), and Tobin's q (market value divided by replacement value) (Busch & Hoffmann, 2011;Fujii, Iwata, Kaneko, & Managi, 2013;Hatakeda, Kokubu, Kajiwara, & Nishitani, 2012;Wang, Li, & Gao, 2014). In addition to improving CEP, the recent literature tends to support the view that CO 2 /GHG emissions management enhances CFP in the manufacturing sectors (except for energy-intensive sectors) (Capece, Di Pillo, Gastaldi, Levialdi, & Miliacca, 2017;Nishitani, Kaneko, Komatsu, & Fujii, 2014). These findings seem to indicate that while CO 2 /GHG emissions are essential to corporate profits, improvement in environmental performance (and its management efforts) is directly linked to CFP.…”

How risk information and stakeholder‐participation affect the sustainability of collaborative decisions: A case study on how the sustainability of stakeholder decisions is affected by different levels of stakeholder participation in preparing risk information

“…An ecosystem's resilience refers to its capacity to absorb technological disturbances while retaining its basic function and structure (Walker & Salt, ). Environmental values should be prioritized through ecosystem stewardship reports on the extent to which socioeconomic activities impact negatively on the resilience of the ecosystem (Capece, Di Pillo, Gastaldi, Levialdi, & Miliacca, ; Halkos & Polemis, ; Reed, ; Sievänen, Rita, & Scholtens, ).…”