The moderating effect of innovation on the relationship between environmental and financial performance: Evidence from high emitters in Australia

Abstract

This study examines whether environmental-related innovation moderates the association between environmental and financial performance measured respectively as carbon emissions and return on assets (ROA). The sample comprises 119 companies subject to Australia's National Greenhouse Energy Reporting Act (NGER) for the period 2009-2017. The results show that environmental innovation positively moderates the relationship between environmental performance and financial performance. The findings also imply that the impact of environmental innovation in improving environmental performance is observable with a 1-year lag. The results are robust to the alternative financial performance measures of Tobin's Q and Altman's Z score. The findings have important implications for company managers and policymakers and provide useful information on innovation's role in enhancing environmental and financial performance.

Sustainability frontiers of strategic risk management and firm survival: The Altman score effectiveness. A bibliometric analysis

“…However, the Altman score model's practicality and common use after so many years seem extraordinary, given the fact that business and economic research now has many new and innovative methodologies. Confirming the uniqueness of the Altman score appear in several studies (Fu & Su, 2021; Wedari et al, 2022; Zhang et al, 2021). A large number of them broaden the application of the altman score by combining it with innovative statistical analysis techniques.…”

“…Confirming the uniqueness of the Altman score appear in several studies (Fu & Su, 2021;Wedari et al, 2022;Zhang et al, 2021). A large number of them broaden the application of the altman score by combining it with innovative statistical analysis techniques.…”

The Moderating Role of Innovation in the Relationship Between Business Sustainability and Organizational Performance in Companies of an Emerging Economy

“…Therefore, for these authors, it is necessary to carry out new research on this relationship in which innovation involves economic, social, and environmental aspects together. Moreover, as stated by Doni and Fiameni (2023), Fernando et al (2019), and Y. Zhang et al (2013)., despite the fact that several studies recognize the moderating role of the innovation in the relationship between business sustainability and organizational performance as a business strategy to respond to the constant, complex, and uncertain changes in the environment, very little research has analyzed this moderating role and therefore, further research is needed in this field for a better understanding by academics, managers, businessmen, and public policy makers in terms of sustainability and business competitiveness.…”

Shari'ah compliance and environmental performance - Evidence from the USA

“…The current study uses four different proxies to measure environmental performance. Our baseline proxies for environmental performance are (1) environmental performance (Orazalin & Mahmood, 2021) and ( 2) environmental innovation score (Wedari, 2022). Also, this study uses two robust proxies for environmental performance: (1) emission score (Khaled, et al, 2021) and (2) CO2 emission (Vieira, et al, 2022).…”