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Does clean technology weaken the environmental impact on the financial performance? Insight from global oil and gas companies

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  • Rayenda Khresna Brahmana
  • Maria Kontesa

Abstract

This study aims to clarify the relationship between environmental performance and financial performance by introducing clean technology as the moderating variable. We contest two major theories, natural resource‐based view theory and neoclassical theory, to reveal a comprehensive understanding of environmental performance's impact on financial performance. The hypotheses are tested on 111 global oil and gas companies using dynamic panel generalized method of moments (GMM). Our analysis reveals three key findings. First, lower environmental performance leads to lower financial performance confirming the natural resource‐based view theory. Second, clean technology has no significant effect on financial performance, arguing the marginal abatement cost. Finally, our results report that clean technology has no impact on increasing financial performance during high waste spills or high emissions. Theoretical and practical implications resulting from the adoption of clean technology to moderate the environmental impact on financial performance are also discussed.

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  • Rayenda Khresna Brahmana & Maria Kontesa, 2021. "Does clean technology weaken the environmental impact on the financial performance? Insight from global oil and gas companies," Business Strategy and the Environment, Wiley Blackwell, vol. 30(7), pages 3411-3423, November.
    • Handle: RePEc:bla:bstrat:v:30:y:2021:i:7:p:3411-3423
    DOI: 10.1002/bse.2810
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    4. Zeeshan Raza & Johan Woxenius, 2023. "Customer‐driven sustainable business practices and their relationships with environmental and business performance—Insights from the European shipping industry," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 6138-6153, December.
    5. Maryam Afghah & Seyed Mojtaba Sajadi & Seyed Mostafa Razavi & Mohammadreza Taghizadeh‐Yazdi, 2023. "Hard dimensions evaluation in sustainable supply chain management for environmentally adaptive and mitigated adverse eco‐effect environmental policies," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 5044-5067, November.
    6. Metawa, Noura & Dogan, Eyup & Taskin, Dilvin, 2022. "Analyzing the nexus of green economy, clean and financial technology," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 385-396.
    7. Katharina Kaupke & Dodo zu Knyphausen‐Aufseß, 2023. "Sustainability and firm value in the oil and gas industry—A vicious circle?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(3), pages 1129-1144, May.

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