Firms’ environmental performance and the COVID-19 crisis

Pierre Guérin and Felix Suntheim

Economics Letters, 2021, vol. 205, issue C

Abstract: The shutdown in economic activity due to the coronavirus disease (COVID-19) crisis has resulted in a short-term decline in global carbon emissions, but the long-term impact of the pandemic on the transition to a low-carbon economy is uncertain. Looking at previous episodes of financial and economic stress to draw implications for the current crisis, we find that tighter financial constraints and adverse economic conditions are generally detrimental to firms’ environmental performance, reducing green investments. The COVID-19 crisis could thus potentially slow down the transition to a low-carbon economy. These findings underline the importance of climate policies and green recovery packages to boost green investment and support the energy transition.

Keywords: Corporate sustainability; Climate change; Transition risks (search for similar items in EconPapers)
JEL-codes: G32 G39 Q54 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:205:y:2021:i:c:s0165176521002330

DOI: 10.1016/j.econlet.2021.109956

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