Corporate GHG emissions and financial performance: A cross-country panel analysis of sectoral heterogeneity in advanced and emerging economies

Marco A. Hernandez Vega

No 2026-02, Working Papers from Banco de México

Abstract: As the urgency to address climate change intensifies, understanding the financial implications of corporate greenhouse gas (GHG) emissions reductions has become critical. This study examines the relationship between emissions reductions and corporate financial performance (CFP) in 513 companies across advanced and emerging market economies (EMEs) from 2010 to 2022. Using a standardized emissions score to mitigate inconsistencies in greenhouse gas reporting, this work analyzes how countries' development levels and sectoral dynamics influence the relationship between GHG emissions and financial outcomes using a panel-fixed effects model. The results are mixed: emissions reductions are positively associated with CFP in advanced economies and low-emitting sectors. However, in high-emitting industries, the association is negative. In contrast, in emerging market economies, the relationship is mixed across sectors, with positive associations concentrated in the Food, Beverages, and Tobacco, as well as the utilities sectors.

Keywords: Climate Change; ESG; Firms Performance; GHG Emissions (search for similar items in EconPapers)
JEL-codes: M41 Q50 Q54 (search for similar items in EconPapers)
Date: 2026-09
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