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Relationship between Wastewater Quality and Corporate Stock Price

Author

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  • Collins C. Ngwakwe

    (University of Limpopo, Polokwane, South Africa)

Abstract

Almost all industrial players handle wastewater treatment in one way or another by themselves, no matter the industry or company's size. Some companies have wastewater treatment plants, and others are considering investments for construction or modernisation. Occasionally, industrial wastewater is discharged to a municipal wastewater treatment plant; however, it must sometimes be pre-treated. Corporate wastewater quality is imperative for environmental responsibility, corporate legitimacy and financial performance. This paper examines the relationship between the reduction of hydrocarbon content of offshore and onshore wastewater and the stock price presented in TotalEnergies. The data on hydrocarbon content reduction in offshore and onshore wastewater discharge was collected from the TotalEnergies 2022 Sustainability and Climate Progress Report. In addition, the data on TotalEnergy's stock price was collected from the FusionMedia online stock price index. Data was analysed quantitatively through the application of a graphical approach. Findings from the graphical analysis of data depict two important dimensions of the stock value effect. Firstly, the results show a corresponding relationship between the reduction in the hydrocarbon content of wastewater and an increase in the stock price value of TotalEnergies. Secondly, the results show that the increase in stock price value continues even beyond the times of hydrocarbon reduction, which shows that investors compensate the company for its previously good performance in hydrocarbon reduction. This legitimacy-ingrained performance shows that hydrocarbon reduction protects the company's value even during uncertainties and/or hindrances in wastewater quality. Based on this finding, the paper develops an inductive hypothesis, opening a new research agenda. The findings are of practical significance for industrial hydrocarbon content reduction and the attraction of short- and long-term financial value to the industry.

Suggested Citation

  • Collins C. Ngwakwe, 2024. "Relationship between Wastewater Quality and Corporate Stock Price," Oblik i finansi, Institute of Accounting and Finance, issue 2, pages 79-84, June.
    • Handle: RePEc:iaf:journl:y:2024:i:2:p:79-84
    DOI: 10.33146/2307-9878-2024-2(104)-79-84
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    References listed on IDEAS

    as
    1. Gull, Ammar Ali & Atif, Muhammad & Ahsan, Tanveer & Derouiche, Imen, 2022. "Does waste management affect firm performance? International evidence," Economic Modelling, Elsevier, vol. 114(C).
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    3. Riccardo Rodella & Maria Rosa De Giacomo, 2023. "How do financial markets reward companies tackling climate change concerns? A natural experiment based on the Brexit referendum," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(2), pages 979-990, March.
    4. Elisabeth Albertini, 2013. "Does Environmental Management Improve Financial Performance? A Meta-Analytical Review," Post-Print halshs-01887802, HAL.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    stock price; wastewater quality; corporate legitimacy; hydrocarbon content; offshore and onshore wastewater;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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