The impact of greenhouse gas emission on corporate’s tail risk

Aljughaiman, Abdullah A.; Cao, Ngan Duong; Albarrak, Mohammed S.

doi:10.1080/20430795.2021.2012117

Cited by 12 publications

(6 citation statements)

References 40 publications

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“…In addition, because environmental costs may be affected by time effects that do not change with the enterprise, such as macroeconomic fluctuations, etc., in order to control the impact of factors that do not change with the individual enterprise but change over time, this paper also adds time fixed effects, that is, this paper finally adopts a two-way fixed effects model for empirical research. This paper first conducts regression analysis on model (1) to test the correlation between enterprise environmental information disclosure and its environmental costs. Secondly, in order to explore the impact of enterprise environmental information disclosure on current and longterm environmental costs, this paper adopts a lag effect, thereby carrying out regression.…”

Section: Regression Analysis 431 Baseline Regression Resultsmentioning

confidence: 99%

“…Contemporary stakeholders are severely scrutinizing environmental behaviors and information disclosure of environmental polluters due to rising environmental issues and ecological degradation [1,2]. Globally, governments are collaborating to take concrete initiatives to combat climate change in emission trading mechanisms, environmental litigation and environmental information disclosure [3,4].…”

Section: Introductionmentioning

confidence: 99%

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Environmental Information Disclosure-Environmental Costs Nexus: Evidence from Heavy Pollution Industry in China

Wang

Shang

et al. 2023

Sustainability

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Environmental disclosure has gained momentum in the past decades due to increasing pressure from different stakeholders, especially in Chinese practice. In the background, previous research focused on the financial performance of environmental information disclosure, and little literature discussed the nexus between environmental information disclosure and environmental costs. The paper made an initial attempt to link environmental disclosure to different aspects of environmental costs (i.e., quality, enterprise size, market orientation, and ownership) based on 234 listed enterprises of heavy pollution industry from Shanghai and Shenzhen A-shares in China from 2013 to 2017. The results showed the following: (i) Environmental information disclosure increased environmental costs in the short term, but the long-term effects were not significant; (ii) Enterprise size could weaken the positive impact of environmental information disclosure on environmental costs; (iii) marketization disrupted the positive link between environmental information disclosure and environmental costs; (iv) Enterprise ownership (state-owned vs. private) had an insignificant effect on the environmental information disclosure and environmental costs nexus. This study could identify the causes of inertia in environmental information disclosure from the perspective of environmental costs, so as to provide practical guidance for activating the initiative of corporate environmental information disclosure.

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Section: Regression Analysis 431 Baseline Regression Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Environmental Information Disclosure-Environmental Costs Nexus: Evidence from Heavy Pollution Industry in China

Wang

Shang

et al. 2023

Sustainability

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“…On the other hand, other CEOs might use CSR to enhance their trading relationship with business partners and reduce firms' operational risks that relate to investors' perception. Aljughaiman et al [52] found that firms that invest more in renewable energy to reduce their gas emissions are more likely to secure investors' goodwill and thus reducing the firms' risks. However, CEOs' characteristics might influence the way they take investment decisions.…”

Section: Ceo Attributes Corporate Sustainability and Financial Perfor...mentioning

confidence: 99%

Corporate Sustainability and Financial Performance: The Moderating Effect of CEO Characteristics

Almulhim,

Aljughaiman

2023

Sustainability

Self Cite

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This study aimed to investigate the effect of corporate sustainability on financial performance as well as examine whether CEO characteristics influence the association between corporate sustainability and the financial performance of listed firms in the Saudi Stock Exchange. In this vein, this study is the first to utilize multiple CEO characteristics as a moderating role influencing the association between corporate sustainability and financial performance. In addition, the study focuses on the developing country of Saudi Arabia, which is one of the top oil producers in the world and is targeting to invest billions of dollars in renewable and sustainable energy projects according to Saudi Vision 2030. We primarily focused on ESG activities (environmental, social, and governance) and their impact on the return on assets and return on equity (employed as a proxy of financial performance). This study used the ordinary least squares (OLS) model to examine these associations as well as the system GMM to test for endogeneity problems. Using a sample of 1143 observations to represent the non-financial firms listed on the Tadawul All Share Index (TASI) for 9 years from 2014 to 2022, we found a negative and significant relationship between the activities of corporate sustainability and financial performance. Furthermore, we demonstrated that CEO characteristics (CEO busyness, CEO ownership, CEO education, CEO gender, and CEO tenure) exerted influence on the association between corporate sustainability and financial performance; that is, CEO busyness, CEO ownership, and CEO gender mitigated the negative influence of corporate sustainability on financial performance, whereas CEO education and CEO tenure made it worse. The results of this study have implications for regulators, firms, and stakeholders.

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“…Likewise, Choi and Luo (2021) claim that companies are penalised in the stock market according to their level of GHG emissions. Aljughaiman et al (2021) find that the most polluting FTSE350‐listed UK companies have a higher probability of extremely negative stock returns, making them more unstable and riskier. The meta‐analysis by Busch and Lewandowski (2018) supports the notion of a positive relationship between good corporate carbon performance (low amounts of carbon emissions) and superior financial performance (mainly market‐based measures).…”

Section: Theoretical Background and Research Questionsmentioning

confidence: 99%

How to explain stock returns of utility companies from an environmental, social and corporate governance perspective

López‐Cabarcos

Santos‐Rodrigues

Quiñoá‐Piñeiro

et al. 2023

Corp Soc Responsibility Env

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Sustainability is a major challenge in today's business world, making environmental, social and governance criteria an indispensable tool for business management and investment decisions. Using 2020 data of 47 companies from the STOXX Europe Total Market Utilities Index and qualitative comparative analysis, this study aims to analyse how the combination of CO2 equivalent emissions, sustainability compensation incentives, environmental investments, environment management training, and policy fair competition leads to utility companies' stock market returns. Two subsample models (electricity and non‐electricity utilities) have been considered in the study. The results point to the absence of CO2 equivalent emissions, the absence of incentives, and the presence of environmental investment as key variables to lead to stock market returns. The findings provide relevant information for managers and practitioners of utilities industry to achieve improvements in the environmental, social and governance management practices, maintaining profitability in financial markets and facilitating decision‐making for investors.

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The impact of greenhouse gas emission on corporate’s tail risk

Cited by 12 publications

References 40 publications

Environmental Information Disclosure-Environmental Costs Nexus: Evidence from Heavy Pollution Industry in China

Environmental Information Disclosure-Environmental Costs Nexus: Evidence from Heavy Pollution Industry in China

Corporate Sustainability and Financial Performance: The Moderating Effect of CEO Characteristics

How to explain stock returns of utility companies from an environmental, social and corporate governance perspective

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