Green Operations and Corporate Financial Performance: Does the ESG Sensitivity Matter?

IF 3 Q2 BUSINESS

Vision-The Journal of Business Perspective Pub Date : 2023-09-10 DOI:10.1177/09722629231194396

Kuldeep Singh

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引用次数: 0

Abstract

This study investigates whether the relationship between green operations (GR-OPS) and corporate financial performance (CFP) is conditional on firms’ adherence to environmental, social and governance (ESG) practices. GR-OPS is quantified as an inverse of the energy intensity (ene-int) of the firm’s operations. CFP is proxied by return on equity and return on assets. The study uses panel data for non-financial firms listed on India’s Bombay Stock Exchange (BSE) 100 index. The ESG-sensitive firms are bifurcated from a broader list of BSE 100 index based on their belongingness to the BSE ESG 100 index for econometric analysis. The findings confirm that the impact of GR-OPS on CFP is subject to the firms’ adherence to ESG practices. A positive relationship between GR-OPS and CFP is established for ESG-sensitive firms, while the linkage is non-existent for non-ESG firms. Such findings are attributable to ESG sensitivity (reduced risks) and not the reduced operational costs due to reduced ene-int. The study claims that the benefits of ESG are evident via GR-OPS. Firms should attempt to meet ESG practices to unlock the financial benefits of GR-OPS. When coupled, these practices can reduce the overall risk of the firms as well as generate better economic profits. Adherence to ESG practices and GR-OPS will build environmentally and socially sensitive firms. This is a greater need of modern society, which is increasingly fighting social unrest, global health concerns and climate change.

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绿色运营与企业财务绩效:ESG敏感性重要吗?

本研究探讨绿色经营(GR-OPS)与企业财务绩效(CFP)之间的关系是否取决于企业对环境、社会和治理(ESG)实践的坚持。GR-OPS被量化为公司运营的能源强度(ene-int)的倒数。CFP由净资产收益率和资产收益率代表。该研究使用了在印度孟买证券交易所(BSE) 100指数上市的非金融公司的面板数据。ESG敏感公司根据其属于BSE ESG 100指数的计量经济分析，从更广泛的BSE 100指数列表中分离出来。研究结果证实，GR-OPS对财务绩效的影响取决于企业对ESG实践的遵守程度。对于esg敏感的企业，GR-OPS与CFP之间存在正相关关系，而对于非esg企业，GR-OPS与CFP之间不存在关联。这些发现可归因于ESG敏感性(降低风险)，而不是由于减少了ene-int而降低了运营成本。该研究声称，通过GR-OPS, ESG的好处是显而易见的。企业应该尝试满足ESG实践，以释放GR-OPS的财务效益。如果结合起来，这些做法可以降低企业的整体风险，并产生更好的经济利润。坚持ESG实践和GR-OPS将建立对环境和社会敏感的公司。这是现代社会的更大需求，现代社会正日益应对社会动荡、全球卫生问题和气候变化。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Vision-The Journal of Business Perspective Multiple-

CiteScore

4.60

自引率

0.00%

发文量

121

期刊介绍： Vision-The Journal of Business Perspective is a quarterly peer-reviewed journal of the Management Development Institute, Gurgaon, India published by SAGE Publications. This journal contains papers in all functional areas of management, including economic and business environment. The journal is premised on creating influence on the academic as well as corporate thinkers. Vision-The Journal of Business Perspective is published in March, June, September and December every year. Its targeted readers are researchers, academics involved in research, and corporates with excellent professional backgrounds from India and other parts of the globe. Its contents have been often used as supportive course materials by the academics and corporate professionals. The journal has been providing opportunity for discussion and exchange of ideas across the widest spectrum of scholarly opinions to promote theoretical, empirical and comparative research on problems confronting the business world. Most of the contributors to this journal range from the outstanding and the well published to the upcoming young academics and corporate functionaries. The journal publishes theoretical as well as applied research works.