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Corporate financial performance: a study based on the Carbon Efficient Index (ICO2) of Brazil stock exchange

Author

Listed:
  • Carlos Rogério Montenegro Lima

    (State Development Agency of Santa Catarina (Badesc))

  • Samuel Borges Barbosa

    (University of Southern Santa Catarina (Unisul))

  • Ruy Castro Sobrosa Neto

    (University of Southern Santa Catarina (Unisul))

  • Daniel Goulart Bazil

    (University of Southern Santa Catarina (Unisul))

  • José Baltazar Salgueirinho Osório Andrade Guerra

    (University of Southern Santa Catarina (Unisul)
    University of Cambridge)

Abstract

The Carbon Efficient Index (ICO2) emerged from a joint initiative of the Brazilian Stock Exchange (B3) with the National Bank for Economic and Social Development, in 2010, through the identification of the market niche, which was made possible by debates on climate change. ICO2 helped participating companies to operate in a so-called low-carbon economy, by monitoring their greenhouse gas emissions. This research performs a comparative analysis between the companies that were part of the ICO2 index and the other companies belonging to the Ibovespa (Brazilian Stock Exchange Index), between the years 2014 and 2018, seeking to identify differences between their economic and financial performance. First, financial indicators—ROIC (return on invested capital), ROE (return on equity), and ROA (return on assets)—were used to compare the performance of the ICO2 and Ibovespa groupings from 2014 to 2018. Second, the Mann–Whitney U test was performed to compare the ROIC, ROE, and ROA performance indicators in the years 2014–2018 for the two groups, ICO2 and Ibovespa. Finally, the cluster analysis was performed for the 2018 indicators. As a result of the analysis, no superior performance was identified for companies belonging to the ICO2 index, corroborating with results from most previous surveys, referenced in this survey. The findings of this study provide an important contribution to the existing research on sustainability in financial markets since there are few available scientific articles that investigate the Brazilian sustainability market using indicators and statistical treatment.

Suggested Citation

  • Carlos Rogério Montenegro Lima & Samuel Borges Barbosa & Ruy Castro Sobrosa Neto & Daniel Goulart Bazil & José Baltazar Salgueirinho Osório Andrade Guerra, 2022. "Corporate financial performance: a study based on the Carbon Efficient Index (ICO2) of Brazil stock exchange," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(3), pages 4323-4354, March.
    • Handle: RePEc:spr:endesu:v:24:y:2022:i:3:d:10.1007_s10668-021-01617-4
    DOI: 10.1007/s10668-021-01617-4
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