Relationship between Wastewater Quality and Corporate Stock Price

Collins C. Ngwakwe
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Collins C. Ngwakwe: University of Limpopo, Polokwane, South Africa

Oblik i finansi, 2024, issue 2, 79-84

Abstract: Almost all industrial players handle wastewater treatment in one way or another by themselves, no matter the industry or company's size. Some companies have wastewater treatment plants, and others are considering investments for construction or modernisation. Occasionally, industrial wastewater is discharged to a municipal wastewater treatment plant; however, it must sometimes be pre-treated. Corporate wastewater quality is imperative for environmental responsibility, corporate legitimacy and financial performance. This paper examines the relationship between the reduction of hydrocarbon content of offshore and onshore wastewater and the stock price presented in TotalEnergies. The data on hydrocarbon content reduction in offshore and onshore wastewater discharge was collected from the TotalEnergies 2022 Sustainability and Climate Progress Report. In addition, the data on TotalEnergy's stock price was collected from the FusionMedia online stock price index. Data was analysed quantitatively through the application of a graphical approach. Findings from the graphical analysis of data depict two important dimensions of the stock value effect. Firstly, the results show a corresponding relationship between the reduction in the hydrocarbon content of wastewater and an increase in the stock price value of TotalEnergies. Secondly, the results show that the increase in stock price value continues even beyond the times of hydrocarbon reduction, which shows that investors compensate the company for its previously good performance in hydrocarbon reduction. This legitimacy-ingrained performance shows that hydrocarbon reduction protects the company's value even during uncertainties and/or hindrances in wastewater quality. Based on this finding, the paper develops an inductive hypothesis, opening a new research agenda. The findings are of practical significance for industrial hydrocarbon content reduction and the attraction of short- and long-term financial value to the industry.

Keywords: stock price; wastewater quality; corporate legitimacy; hydrocarbon content; offshore and onshore wastewater (search for similar items in EconPapers)
JEL-codes: O16 P48 Q53 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:iaf:journl:y:2024:i:2:p:79-84

DOI: 10.33146/2307-9878-2024-2(104)-79-84

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