The impacts of carbon (CO2) emissions and environmental research and development (R&amp;D) investment on firm performance

Abstract:The impact of carbon emissions on corporate financial performance within the African corporate setting has remained open and inconclusive, owing primarily to the unavailability of data. However, this paper examines the effect of carbon emissions (Scope 1, Scope 2, and Scope 1 and 2) on the financial performance (ROE, ROI, and ROS) of 63 South African CDP companies for the 2015 fiscal year. Using multiple regression techniques, the paper found overwhelming evidence of a negative relationship between carbon emissions and corporate financial performance. Thus, results indicate that companies which integrate green investment initiatives designed to lower carbon emissions can effectually manage financial performance. Therefore, the paper provides useful insights on how companies can fully utilise their organisational resources and capabilities as well as gain insight, resulting in a higher environmental and financial performance within a firm.

Section: Empirical Study Results and The Development Of The Hypothesismentioning

confidence: 99%

The Impact of Carbon Emissions on Corporate Financial Performance: Evidence from the South African Firms

Ganda

Milondzo

2018

“…As we know, the type and the amount of the environmental protection investment must be approved by the government and the firm [53]. In addition, a higher growth rate indicates better environmental performance [54,55]. Thus, growth rate of environmental protection investment reflects environmental performance.…”

Section: Data Collection and Variables Definitionmentioning

confidence: 99%

Environmental Performance and Financing Decisions Impact on Sustainable Financial Development of Chinese Environmental Protection Enterprises

Zhang

Chen

2017

Environmental protection firms need to improve their ability to access financing while maintaining good economic performance under mounting environmental pressures. After the integration of trade-off and stakeholder theories, we have constructed a number of mathematical models to investigate the relationship among financing decisions, environmental performance (EP), and economic performance. Unbalanced panel data from environmental protection companies listed on Chinese stock exchanges from 2007 to 2016 were collected and analyzed. Our results have confirmed that debt financing has a significant impact on short-and long-term economic performance. Firms prefer long-term debt over short-term debt to improve their financial sustainability. Internal financing is positively related to performance because the cost of financing is lower. Environmental performance can cause extra financial burden in the short run, but will improve stakeholder relations and profitability in the long run. Our study suggests that environmental performance affects the relationship between financing decisions and economic performance. When EP initiatives are high, debt financing has a greater negative influence on short-term performance, and the effect on long-term performance is mitigated. High EP also reduces the impact of internal financing on performance.

“…Notably, in the FAHP calculation, all the judgment matrices were iterated to their ConR, which was less than 0.1. To evaluate and predict environmental performance, we can substitute global weight results in formula (20) as follows:…”

Section: Fahp Analysis Resultsmentioning

confidence: 99%

“…EPEM " 0.269F 1`0 .163F 2`0 .15F 3`0 .108F 4`0 .097F 5`0 .067F 6`0 .053F 7`0 .034F 8`0 .027F 90 .022F 10`0 .011F 11 (20) …”

Section: Fahp Analysis Resultsmentioning

confidence: 99%

A Novel Environmental Performance Evaluation of Thailand’s Food Industry Using Structural Equation Modeling and Fuzzy Analytic Hierarchy Techniques

Pipatprapa

Huang

2016

Currently, the environment and sustainability are important topics for every industry. The food industry is particularly complicated in this regard because of the dynamic and complex character of food products and their production. This study uses structural equation modeling (SEM) and a fuzzy analytic hierarchy process (FAHP) to investigate which factors are suitable for evaluating the environmental performance of Thailand's food industry. A first-stage questionnaire survey was conducted with 178 managers in the food industry that obtained a certificate from the Department of Industrial Work of Thailand to synthesize the performance measurement model and the significance of the relationship between the indicators. A second-stage questionnaire measured 18 experts' priorities regarding the criteria and sub-factors involved in the different aspects and assessment items regarding environmental performance. SEM showed that quality management, market orientation, and innovation capability have a significantly positive effect on environmental performance. The FAHP showed that the experts were most concerned about quality management, followed by market orientation and innovation capability; the assessment items for quality policy, quality assurance, and customer orientation were of the most concern. The findings of this study can be referenced and support managerial decision making when monitoring environmental performance.