Carbon performance and firm value of the World's most sustainable companies

Ramzi Benkraiem, Fatima Shuwaikh, Faten Lakhal and Assil Guizani

Economic Modelling, 2022, vol. 116, issue C

Abstract: This study examines how carbon performance affects a firm's market value. It also studies how this effect is driven by leadership, gender diversity and innovation capacity. This study used a panel of the world's most sustainable companies ranked according to Corporate Knights between 2013 and 2019. The results revealed that carbon performance positively influenced firm market value, thereby indicating that investors rewarded firms with low levels of carbon emissions. This positive effect was more prevalent in firms with a high level of gender diversity and innovation capacity. The findings also demonstrate that rank-up and high-polluting firms continually increased their efforts to be sustainable, which increased the positive effect of carbon performance on firm value. Our results are robust to alternative measures and concerns about endogeneity.

Keywords: Carbon performance; Firm value; Gender diversity; Innovation capacity; Sustainability (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:116:y:2022:i:c:s0264999322002437

DOI: 10.1016/j.econmod.2022.106002

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