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Paving the road toward eco‐effectiveness: Exploring the link between greenhouse gas emissions and firm performance

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  • Angeloantonio Russo
  • Stefano Pogutz
  • Nicola Misani

Abstract

Climate change has increasingly attracted business attention over the last decade, focusing particularly on the eco‐efficiency debate. The goal of this paper is twofold. First, we contribute to the ongoing debate on the effects of environmental strategies on firm performance. We investigate this relationship by considering the relative greenhouse gas emissions (GHG) as a predictor of the eco‐efficiency of firms' environmental strategies. GHG emissions are a direct indicator of the environmental performance and effectively measure the firm's efforts in mitigating the impacts related to its processes and products. Second, we investigate the drivers that lead to an increase in the firm's environmental impact under the conditions of increasing market performance by the firm, therefore paving the road to the concept of eco‐effectiveness of corporate environmental strategies. To test our hypotheses, we use a sample of worldwide listed companies derived from the S&P 1200 list. A longitudinal analysis is run through generalized least squares regression models over the period 2004–2016. Results offer evidence of the direct relationship between the level of absolute emissions and market performance of the firm. Therefore, the findings have significant implications on the way we conceptualize corporate environmental sustainability and environmental strategies, shedding new light on the relation between environmental pressures and corporate growth.

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  • Angeloantonio Russo & Stefano Pogutz & Nicola Misani, 2021. "Paving the road toward eco‐effectiveness: Exploring the link between greenhouse gas emissions and firm performance," Business Strategy and the Environment, Wiley Blackwell, vol. 30(7), pages 3065-3078, November.
    • Handle: RePEc:bla:bstrat:v:30:y:2021:i:7:p:3065-3078
    DOI: 10.1002/bse.2789
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    2. Alexandra França & Lucas López‐Manuel & Antonio Sartal & Xosé H. Vázquez, 2023. "Adapting corporations to climate change: How decarbonization impacts the business strategy–performance nexus," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 5615-5632, December.
    3. Benkraiem, Ramzi & Dubocage, Emmanuelle & Lelong, Yann & Shuwaikh, Fatima, 2023. "The effects of environmental performance and green innovation on corporate venture capital," Ecological Economics, Elsevier, vol. 210(C).
    4. Oksana Seroka-Stolka, 2023. "Enhancing Environmental Sustainability: Stakeholder Pressure and Corporate CO 2 -Related Performance—An Examination of the Mediating and Moderating Effects of Corporate Decarbonization Strategies," Sustainability, MDPI, vol. 15(19), pages 1-18, September.
    5. Mariani, Massimo & Caragnano, Alessandra & D'Ercole, Francesco & Frascati, Domenico, 2024. "Carbon intensity and market pricing: An asymmetric valuation," International Review of Financial Analysis, Elsevier, vol. 93(C).
    6. Maryam Afghah & Seyed Mojtaba Sajadi & Seyed Mostafa Razavi & Mohammadreza Taghizadeh‐Yazdi, 2023. "Hard dimensions evaluation in sustainable supply chain management for environmentally adaptive and mitigated adverse eco‐effect environmental policies," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 5044-5067, November.

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