Environmental and Corporate Financial Performance: Disentangling Mitigation and Adaptation Strategies

Nicolas Baelen ()
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Nicolas Baelen: IAE Dijon - Institut d'Administration des Entreprises (IAE) - Dijon - UB - Université de Bourgogne, CREGO - Centre de Recherche en Gestion des Organisations - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UB - Université de Bourgogne - UBFC - Université Bourgogne Franche-Comté [COMUE] - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]

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Abstract: Using a unique dataset of 3,554 firms from 42 countries during 2012- 2016, we examine the impact of mitigation and adaptation to climate change strategies on firm financial performance. Measuring financial performance by accounting and market-based indicators, we find evidence that mitigation is positively related to both indicators. In contrast, adaptation to climate change strategy is only associated with greater market-based financial performance. Building on these results, we attempt to explore complementarity or substitutability between the different strategies. Mitigation and adaptation strategies appear as complementary inputs of accounting-based financial performance. Conversely, mitigation and adaptation strategies positively impact market-based financial performance, whether they are independently or simultaneously implemented. Our results suggest that investors reward environmental strategies in a period of increasing environmental concerns without drawing any distinction between mitigation and adaptation processes.

Keywords: Adaptation; complementarity; environmental performance; financial performance; mitigation (search for similar items in EconPapers)
Date: 2021
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Published in Revue française de gouvernance d'entreprise, 2021, 24/25, p. 82-128

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04701697

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