Carbon Footprint and Performance of Quoted Insurance Firms in Sub-Saharan African Countries

Purpose: This study examined the effect of the rate of carbon footprints in an economy on the financial performance of listed insurance companies in selected countries in the sub-Saharan African region. It is argued in the study that factors that are external to the insurance industry (carbon footprint) intensify risks faced by the insurance firms.Methodology: The study employs secondary data from the sampled insurance firms’ annual audited financial statements. Data was collected from forty-five (45) insurance firms in eight (8) selected sub-Saharan African countries from 2010 to 2019. A dynamic estimation procedure was adopted based on the system GMM estimation technique using dependent variables (ROA, ROE and Tobin’s Q), explanatory variable CO2 emission and moderating variables of firm’s size, economic growth and inflation rate.Results/Findings: The results from the study reveal that the pattern of effects of carbon footprints differ in terms of the measurement used for a performance indicator. In particular, the study found that the level of carbon footprint in the economy exerts significant negative effects on all the performance indicators of insurance firms. Optimal risk and sustainable insurance procedures are therefore recommended in the study.