Drawing on the literature on organizations and the natural environment, we study the relationship between the firm carbon intensity, its responsiveness to climate change and its market value. To explore this relationship, we analyze a worldwide sample of 164 firms that have disclosed their greenhouse gas (GHG) emissions through the Carbon Disclosure Project in 2006-2008. The results confirm the well established negative effect of high environmental impact on firm financial performance but show that carbon intensity does not affect the responsiveness of the firm to climate change issues. However, organizational responsiveness is positively valued by the financial markets and has a moderating effect on the negative relationship between the firm carbon intensity and the market valuation of firms.
The impact of carbon intensity on financial performance: the moderating effect of responsiveness
MISANI, NICOLA;POGUTZ, STEFANO;RUSSO, ANGELOANTONIO
2012
Abstract
Drawing on the literature on organizations and the natural environment, we study the relationship between the firm carbon intensity, its responsiveness to climate change and its market value. To explore this relationship, we analyze a worldwide sample of 164 firms that have disclosed their greenhouse gas (GHG) emissions through the Carbon Disclosure Project in 2006-2008. The results confirm the well established negative effect of high environmental impact on firm financial performance but show that carbon intensity does not affect the responsiveness of the firm to climate change issues. However, organizational responsiveness is positively valued by the financial markets and has a moderating effect on the negative relationship between the firm carbon intensity and the market valuation of firms.
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