Climate change has increasingly attracted business attention over the last decade, and it will probably be so in the next years. 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 considering the greenhouse gas emissions (GHG) as an independent variable. 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 empirically exploring the link between market performance and GHG emissions. To test our hypotheses, we use a sample of worldwide listed companies derived from the Global Fortune 500 index. A longitudinal analysis is run through a two-stage least square regression over the period 2002-2005. The findings have significant implications on the way we conceptualize corporate environmental sustainability and environmental strategies, opening a debate on the relations between eco-efficiency and eco-effectiveness.
Eco-efficiency vs. eco-effectiveness. Exploring the link between GHG emissions ans firm performance
RUSSO, ANGELOANTONIO;POGUTZ, STEFANO
2009
Abstract
Climate change has increasingly attracted business attention over the last decade, and it will probably be so in the next years. 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 considering the greenhouse gas emissions (GHG) as an independent variable. 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 empirically exploring the link between market performance and GHG emissions. To test our hypotheses, we use a sample of worldwide listed companies derived from the Global Fortune 500 index. A longitudinal analysis is run through a two-stage least square regression over the period 2002-2005. The findings have significant implications on the way we conceptualize corporate environmental sustainability and environmental strategies, opening a debate on the relations between eco-efficiency and eco-effectiveness.
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