A Comparative Approach of the Environmental Performance between Periods with Positive and Negative Accounting Returns of EEA Companies

Mirela Sichigea, Marian Ilie Siminica, Daniel Circiumaru, Silviu Carstina and Nela-Loredana Caraba-Meita
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Mirela Sichigea: Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A I Cuza Street, 200585 Craiova, Romania
Marian Ilie Siminica: Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A I Cuza Street, 200585 Craiova, Romania
Daniel Circiumaru: Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A I Cuza Street, 200585 Craiova, Romania
Silviu Carstina: Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A I Cuza Street, 200585 Craiova, Romania
Nela-Loredana Caraba-Meita: Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A I Cuza Street, 200585 Craiova, Romania

Sustainability, 2020, vol. 12, issue 18, 1-18

Abstract: In recent years, sustainable growth has become an important issue in the business field. Environment, social, and governance (ESG) actions of companies have come to represent key elements in adopting decisions by stakeholders. The question is to what extent they validate the companies’ environmental behaviour, as profitability varies over time. The answer can be obtained by analysing the relationship between environmental performance (EP) and financial performance (FP) of the firms. The paper proposes a new perspective of this relationship, namely, the separate assessment of the EP–FP in the case of positive and negative FP (expressed through accounting returns). A survey on 299 companies in the European Economic Area (EEA), operating in extractives and minerals processing and health care, was conducted. The data were extracted from the Refinitiv database for the period 2009–2018. The findings showed a significant EP–FP correlation in the case of the extractives and minerals processing industry, but their dependency slightly varied on the positive and negative returns’ scenario. As for the healthcare industry, the best result was a moderate correlation between EP and the negative return. Our findings support a managerial design of environmental policy, as well as the future academic research of the EP–FP relationship.

Keywords: environmental performance; financial performance; sustainable development; return on assets; return on equity (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:18:p:7382-:d:410823

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