Green, greener, greenest: Identifying ecological trends and leading entities by means of environmental ratings

Benjamin R. Auer

International Review of Applied Economics, 2018, vol. 32, issue 2, 139-162

Abstract: In this article, we analyse whether industries worldwide significantly react to the changing environmental demands of their stakeholders. Specifically, we test the hypothesis of increasing environmentally responsible company behaviour in recent years. We do this by constructing environmental industry ratings based on a novel data-set covering three geographic regions and 42 industries from 2009 to 2015 and by fitting robust trend regression models to these ratings. Interestingly, we cannot observe a general upward trend in all industries and regions. In other words, the ‘green wave’ does not appear to carry all business sectors. This becomes particularly clear when looking at rankings derived from estimated trends. Industries in Europe show especially significant downward trends. Even though most European industries are currently rated higher than their counterparts in the Asia-Pacific region and North America, these trends indicate that Europe may lose this leading position in the future. Besides delivering such general tendencies, our estimated trends combined with the current rating levels provide important decision support. They show which industry sectors and regions are particularly (un)interesting for socially responsible investment products, ecologically conscious applicants or environmentally responsible consumers.

Date: 2018
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DOI: 10.1080/02692171.2017.1332015

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