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A Comparative Approach of the Environmental Performance between Periods with Positive and Negative Accounting Returns of EEA Companies

Author

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  • Mirela Sichigea

    (Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A I Cuza Street, 200585 Craiova, Romania)

  • Marian Ilie Siminica

    (Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A I Cuza Street, 200585 Craiova, Romania)

  • Daniel Circiumaru

    (Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A I Cuza Street, 200585 Craiova, Romania)

  • Silviu Carstina

    (Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A I Cuza Street, 200585 Craiova, Romania)

  • Nela-Loredana Caraba-Meita

    (Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A I Cuza Street, 200585 Craiova, Romania)

Abstract

In recent years, sustainable growth has become an important issue in the business field. Environment, social, and governance (ESG) actions of companies have come to represent key elements in adopting decisions by stakeholders. The question is to what extent they validate the companies’ environmental behaviour, as profitability varies over time. The answer can be obtained by analysing the relationship between environmental performance (EP) and financial performance (FP) of the firms. The paper proposes a new perspective of this relationship, namely, the separate assessment of the EP–FP in the case of positive and negative FP (expressed through accounting returns). A survey on 299 companies in the European Economic Area (EEA), operating in extractives and minerals processing and health care, was conducted. The data were extracted from the Refinitiv database for the period 2009–2018. The findings showed a significant EP–FP correlation in the case of the extractives and minerals processing industry, but their dependency slightly varied on the positive and negative returns’ scenario. As for the healthcare industry, the best result was a moderate correlation between EP and the negative return. Our findings support a managerial design of environmental policy, as well as the future academic research of the EP–FP relationship.

Suggested Citation

  • Mirela Sichigea & Marian Ilie Siminica & Daniel Circiumaru & Silviu Carstina & Nela-Loredana Caraba-Meita, 2020. "A Comparative Approach of the Environmental Performance between Periods with Positive and Negative Accounting Returns of EEA Companies," Sustainability, MDPI, vol. 12(18), pages 1-18, September.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:18:p:7382-:d:410823
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    Cited by:

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    2. Loredana-Georgia Nițu (Ivan), 2023. "The environmental and financial performances on the energy sector. Case study in North America," Journal of Financial Studies, Institute of Financial Studies, vol. 14(8), pages 151-165, June.
    3. Carlos A. Piccioni & Saulo B. Bastos & Daniel O. Cajueiro, 2024. "Stock Price Reaction to Environmental, Social, and Governance News: Evidence from Brazil and Financial Materiality," Sustainability, MDPI, vol. 16(7), pages 1-25, March.
    4. Loredana-Georgia Nițu (Ivan), 2024. "Evaluating the Interplay between ESG Practices and Corporate Financial Performance in America: The Industrial Sector," Journal of Financial Studies, Institute of Financial Studies, vol. 16(9), pages 194-204, May.
    5. Gratiela Georgiana Noja & Eleftherios Thalassinos & Mirela Cristea & Irina Maria Grecu, 2021. "The Interplay between Board Characteristics, Financial Performance, and Risk Management Disclosure in the Financial Services Sector: New Empirical Evidence from Europe," JRFM, MDPI, vol. 14(2), pages 1-20, February.
    6. repec:fst:rfsisf:v:8:y:2023:i:special-june_2023:p:151-165 is not listed on IDEAS
    7. Kilvia Cristina Amaral da Luz & Nayane Thais Krespi Musial, 2023. "Can Organizational Culture Encourage Corporate Social Responsibility and Improve Environmental Performance in [B]³ Companies?," Journal of Management and Sustainability, Canadian Center of Science and Education, vol. 13(1), pages 215-215, July.

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