Relations between corporate economic performance, environmental disclosure and greenhouse gas emissions: new insights.

Hassan, Omaima A.G.; Romilly, Peter

Abstract

This study examines the associations and causations between corporate economic performance, environmental disclosure and greenhouse gas emissions, utilising a large, longitudinal, multi-country dataset disaggregated between developed and developing countries. The methodology employs a simultaneous equation model with system estimation to deal with endogeneity between the variables, and Granger causality tests to indicate their direction of causation. A robust result is that lower emissions are strongly associated with better economic performance. After pretesting for stationarity, we find evidence of a one-way causation from emissions and environmental disclosure to economic performance, but no evidence of reverse causation. We also find strong evidence of a one-way causation from emissions to disclosure, but no evidence of reverse causation. The over-arching policy implication is that environmental performance, as measured by greenhouse gas emissions, plays a crucial role in the formulation of business strategy at firm level and government environmental policy at national and international levels.

Citation

HASSAN, O.A.G. and ROMILLY, P. 2018. Relations between corporate economic performance, environmental disclosure and greenhouse gas emissions: new insights. Business strategy and the environment [online], 27(7), pages 893-909. Available from: https://doi.org/10.1002/bse.2040

• Journal Article Type: Article
• Acceptance Date: Dec 14, 2017
• Online Publication Date: Feb 13, 2018
• Publication Date: Nov 30, 2018
• Deposit Date: Dec 19, 2017
• Publicly Available Date: Feb 14, 2020
• Journal: Business strategy and the environment
• Print ISSN: 0964-4733
• Electronic ISSN: 1099-0836
• Publisher: Wiley Open Access
• Peer Reviewed: Peer Reviewed
• Volume: 27
• Issue: 7
• Pages: 893-909
• DOI: https://doi.org/10.1002/bse.2040
• Keywords: Economic; Environmental; Performance; Disclosure; Greenhouse gases; Environmental policy
• Public URL: http://hdl.handle.net/10059/2632