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Can environmental sustainability be used to manage energy price risk?

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  • Henriques, Irene
  • Sadorsky, Perry
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    Abstract

    Energy security issues and climate change are two of the most pressing problems facing society and both of these problems are likely to increase energy price variability in the coming years. This paper develops and estimates a model of a company's energy price exposure and presents evidence showing that increases in a company's environmental sustainability lowers its energy price exposure. This result is robust across two different measures of energy prices. These results should be useful to companies seeking new ways of addressing energy price risk as well as governments concerned about the impact that energy price risk can have on economic growth and prosperity.

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    File URL: http://www.sciencedirect.com/science/article/B6V7G-4Y70C76-1/2/a716ca629028528d28896f5b50ad7bdb
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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Economics.

    Volume (Year): 32 (2010)
    Issue (Month): 5 (September)
    Pages: 1131-1138

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    Handle: RePEc:eee:eneeco:v:32:y:2010:i:5:p:1131-1138

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    Web page: http://www.elsevier.com/locate/eneco

    Related research

    Keywords: Environmental sustainability Energy price risk Stock prices Oil prices;

    References

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    Cited by:
    1. Henriques, Irene & Sadorsky, Perry, 2011. "The effect of oil price volatility on strategic investment," Energy Economics, Elsevier, vol. 33(1), pages 79-87, January.

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