The impact of profitability on scope 1, 2 and 3 GHG emissions in Europe

Yannick Hohenstein

Junior Management Science (JUMS), 2025, vol. 10, issue 2, 292-333

Abstract: This thesis examines the effect of corporate profitability on the levels of greenhouse gas (GHG) emissions, specifically analyz-ing Scope 1, 2, and 3 emissions for European companies listed on the STOXX Europe 600 index from 2017 to 2023. Givenincreasing regulatory pressures, inconclusive evidence on whether profitability drives sustainability, and potential bidirectionalcausality, researching this relationship is highly relevant. Using a systematic literature review (SLR) and fixed-effects regres-sions, this thesis investigates this relationship. Results show profitability, measured by return on assets (ROA), negativelycorrelates with Scope 3 emissions, suggesting higher profits may promote sustainability. However, no significant correlationexists for Scope 1 and 2 emissions, except for a positive link with Scope 2 emissions in low-emission sectors. High-emissionindustries show stronger model explanatory power, indicating a closer profitability-emissions link. Findings are robust againstoutliers but vary with changing profitability metrics. This research contributes to the profitability-sustainability debate, offer-ing insights for policymakers, scholars, and managers, while emphasizing the need to consider industry and Scope-specificdynamics to combat climate change.

Keywords: GHG emissions; profitability; sustainability reporting (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/320449/1/1928900925.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:jumsac:320449

DOI: 10.5282/jums/v10i2pp292-33

Access Statistics for this article

Junior Management Science (JUMS) is currently edited by Dominik van Aaken, Gunther Friedl, Christian Koziol, Sascha Raithel

More articles in Junior Management Science (JUMS) from Junior Management Science e. V.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().