Macroeconomic and microeconomic environmental and energy policies: are they effective for improving environmental performance of listed companies?

We empirically investigate the effectiveness of environmental and energy policies, complying with legal requirements or followed voluntarily by firms, on the pro-environmental efforts of 63 listed firms in Italy in the years 2008-2019. Our research design combines macroeconomic data referring to general policies for reducing air emissions, renewable energy interventions and energy efficiency measures with analogous policies applied at firm level on voluntary basis. The empirical analysis is performed in a panel data context by means of propensity score matching with multiple treatments, which allows us to test the effectiveness of (1) macroeconomic policies on firm environmental performance; (2) microeconomic policies on firm environmental performance, and (3) the coexistence of macroeconomic and microeconomic policies on firm environmental performance. Our results show that the effectiveness of these interventions, applied either separately or jointly, depends on the type of indicator used to proxy firm environmental performance. In particular, we find that the social costs of climate change are not internalized by listed companies, and that macroeconomic interventions are an excellent tool to implement because they are effective to fight climate change where voluntary actions fail and are also complementary to voluntary actions, since they support their effectiveness.