Companies with lower greenhouse gas emissions achieve better financial performance
In view of the climate crisis, more and more companies are doing their best to reduce greenhouse gas emissions. There are many concerns about its effects on the financial performance. Will the companies that try the hardest not lose competitiveness? Professor Bert Scholtens and Jan Taeke Galama MSc o f the University of Groningen have carried out research on this. This shows that companies with fewer greenhouse gas emissions achieve better financial results. Their results have now been published in the prestigious Environmental Research Letters.
Galama and Scholtens did a meta-analysis on the period from the signing of the Kyoto Protocol in 1997 to 2019. This means that they selected and further analyzed existing studies on the relationship between greenhouse gas emissions and financial performance. In this way, they were able to make use of all the existing results in this area and draw an overarching conclusion. They have used over 100,000 observations in their analysis.
In the Kyoto Protocol, industrialized countries agreed to reduce their greenhouse gas emissions. It is the basis of, among other things, the Paris Climate Agreement and is also the basis of Dutch climate policy.
The research shows that there is a significant correlation between emissions and financial performance: companies with lower emissions do relatively better financially. This applies to different financial measures like profitability and stock market returns, albeit not to the same extent. It also applies to different emission measures and both mandatory and voluntary disclosure.
The sector in which the companies operate plays only a limited role, according to Galama and Scholtens. However, they find a clear influence of the stringency of climate policies: if this is stricter, there is a stronger relationship between emissions and financial performance. This is clearly a boost for countries with more stringent policies.
For more information:Professor Bert Scholtens: l.j.r.scholtens rug.nl
The investigation has been carried out independently and publicly accessible
Last modified: | 01 February 2023 4.20 p.m. |
More news
-
29 April 2024
Royal Decoration awarded to Gerard van den Berg
The Faculty of Economics and Business is very proud to announce that Professor Gerard van den Berg has been appointed Officer of the Order of Orange-Nassau. The decoration was presented to him by Mayor Koen Schuiling of the Municipality of...
-
29 April 2024
Guido Berends and Hylke Dijkstra win FEB Research Awards 2023
The awards for best PhD thesis and best graduate of the research master were presented at the annual PhD conference held on April 18. Guido Berends won the Best PhD Thesis Award 2023 and Hylke Dijkstra won the Research Master Graduate Award 2023.
-
25 April 2024
Lineke Sneller appointed as Professor of Practice of Digitalization & AI in Accounting and Auditing
The Faculty of Economics and Business (FEB) is pleased to announce that as of 1 May, professor Lineke Sneller will be appointed as Professor Practice of Digitalization & AI in Accounting and Auditing. The chair is situated within the department of...