A firm level Environmental Kuznets Curve Evaluation: thresholds in a cross-sectional dataset of mid-sized companies

Marine Kohler (), Natalia Costa I Coromina, Pascal da Costa (), Peter Penner and François Cluzel ()
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Marine Kohler: LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay
Natalia Costa I Coromina: Energy Impact Partners
Pascal da Costa: LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay
Peter Penner: Energy Impact Partners
François Cluzel: LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay

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Abstract: In a context of insufficient global regulation, a significant proportion of private corporations have set voluntary greenhouse gas emissions reduction targets. Drawing on a new dataset of about 1,500 anonymized, GHG Protocol-based assessments, across approximately a thousand Europe and U.S based SMEs and some larger corporations, we aim to investigate how emissions metrics compare across companies in various industries and with varying size and economic performances. We leverage competing polynomial and threshold regression models to establish that contrary to the classic inverted-U shape of the Environmental Kuznets Curve, corporate emissions do not exhibit a marked turning point but rather stabilize beyond a critical threshold in revenue per employee. We also propose a linear mixed-effect regression model to study Granger causality and suggest that emissions metrics and firm productivity are intertwined. We derive practical recommendations for target-setting approaches to enhance both the measurability, effectiveness and fairness of corporate net-zero targets. In particular, we recommend avoiding the use of grandfathering for companies with lower levels of revenue per employee or anticipating future productivity gains when designing objectives.

Keywords: Corporate Net-Zero targets; Threshold approach; Environmental Kuznets curve; Corporate climate performance (search for similar items in EconPapers)
Date: 2025-07-17
Note: View the original document on HAL open archive server: https://hal.science/hal-05170003v1
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