Financial outcomes of environmental risk and opportunity for US companies

Natalia Semenova and Lars G. Hassel
Additional contact information
Natalia Semenova: Åbo Akademi University, Finland, Postal: Åbo Akademi University, Finland

Sustainable Development, 2008, vol. 16, issue 3, 195-212

Abstract: The study extends previous research on the relation between environmental and financial performance in two ways. First, we recognize that inherent environmental risk differs among industries. Increased levels of industry risk cause companies to have lower market values even if they are more profitable than companies in low risk industries. Second, we decompose the multi-dimensional environmental opportunity construct into dimensions of preparedness and performance. As an extension of previous research on the economic value of environmental performance, we show that the reputational benefits of environmental preparedness mainly increase market value, while environmental performance also can bring operational benefits to financial performance. In high risk or polluting industries, environmental management is costly and reduces the operating performance of companies. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

Downloads: (external link)
http://hdl.handle.net/10.1002/sd.365 Link to full text; subscription required (text/html)

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:wly:sustdv:v:16:y:2008:i:3:p:195-212

DOI: 10.1002/sd.365

Access Statistics for this article

Sustainable Development is currently edited by Richard Welford

More articles in Sustainable Development from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().