The Impact of ESG Regulation on Environmental Decoupling—An Exploratory Study on Polish Listed Companies

Marco Papa, Monika Wieczorek-Kosmala (), Anna Losa and Aleksandra Swałek
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Marco Papa: Department of Economics and Finance, University of Bari Aldo Moro, 70121 Bari, Italy
Monika Wieczorek-Kosmala: Faculty of Spatial Economy and Regions in Transition, University of Economics in Katowice, 40-287 Katowice, Poland
Anna Losa: Faculty of Informatics and Communication, University of Economics in Katowice, 40-287 Katowice, Poland
Aleksandra Swałek: Faculty of Economics, University of Economics in Katowice, 40-287 Katowice, Poland

Sustainability, 2024, vol. 16, issue 17, 1-11

Abstract: The sustainable finance framework implements the regulation to enhance firms’ sustainable reporting and increase market transparency in channeling funds. However, firms are under the pressure of going green and, thus, often demonstrate a propensity to environmental decoupling, which means the gap between what is told about environmental performance and what is truly done within. The main purpose of our exploratory work is to detect the environmental decoupling among sampled firms. The research problem relates to the effects of reporting requirements and aligning symptoms of environmental decoupling by comparing the increase in qualitative disclosures (talk) relative to measurable KPIs (real actions). We have empirically confirmed the potential problems of environmental decoupling within the environmental aspects other than carbon emissions. We have observed the improvement of qualitative disclosures, while the KPIs other than carbon-emission-related (use of resources and energy) confirmed no real actions. This result is aligned with the current policymakers’ focus on carbon emission reporting. Firms declare the implementation of policies and targets, but it does not fully drive real change. Our study contributes to the emerging strand of the literature on environmental decoupling, as well as offers implications for policymakers, to enhance the efficiency (and prevent environmental decoupling) within the new sustainable finance regulatory framework of the European Union.

Keywords: environmental decoupling; sustainability reporting; environmental disclosures; ESG; ESG communication (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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