IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i5p1785-d1343276.html

The Impact of Climate Action on the Financial Performance of Food, Grocery, and Supermarket Retailers in the UK

Author

Listed:
  • Tolu Olarewaju

    (Keele Business School, Keele University, Keele, Newcastle-under-Lyme ST5 5BG, UK)

  • Samir Dani

    (Keele Business School, Keele University, Keele, Newcastle-under-Lyme ST5 5BG, UK)

  • Collins Obeng-Fosu

    (Keele Business School, Keele University, Keele, Newcastle-under-Lyme ST5 5BG, UK)

  • Tayo Olarewaju

    (Peter A. Allard School of Law, The University of British Columbia, Allard Hall, 1822 E Mall, Vancouver, BC V6T 1Z1, Canada)

  • Abdul Jabbar

    (Leicester School of Business, University of Leicester, Brookfield, Leicester LE2 1RQ, UK)

Abstract

We examined the impact of climate action on the financial performance of eleven food, grocery, and supermarket retailers listed on the London Stock Exchange from 2013 to 2022. Our findings reveal a positive association between the climate mitigation efforts of these businesses and financial performance, particularly in terms of returns on assets (ROA). Through Ordinary Least Squares estimation, we identified that climate action practices such as renewable energy usage, waste reduction, adoption of energy-efficient technologies, eco-friendly packaging, and optimized transportation are significantly associated with the ROA of UK-based food, grocery, and supermarket retailers. This study is significant as these retailers often have extensive operations and supply chains that contribute to greenhouse gas emissions. It demonstrates that engaging in climate mitigation measures can still lead to a positive ROA.

Suggested Citation

  • Tolu Olarewaju & Samir Dani & Collins Obeng-Fosu & Tayo Olarewaju & Abdul Jabbar, 2024. "The Impact of Climate Action on the Financial Performance of Food, Grocery, and Supermarket Retailers in the UK," Sustainability, MDPI, vol. 16(5), pages 1-23, February.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:5:p:1785-:d:1343276
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/5/1785/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/5/1785/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Francesco Perrini & Angeloantonio Russo & Antonio Tencati & Clodia Vurro, 2011. "Deconstructing the Relationship Between Corporate Social and Financial Performance," Journal of Business Ethics, Springer, vol. 102(1), pages 59-76, March.
    2. Olga Hawn & Ioannis Ioannou, 2016. "Mind the gap: The interplay between external and internal actions in the case of corporate social responsibility," Strategic Management Journal, Wiley Blackwell, vol. 37(13), pages 2569-2588, December.
    3. Khurana, Ritika & Mugabe, Douglas & Etienne, Xiaoli L., 2022. "Climate change, natural disasters, and institutional integrity," World Development, Elsevier, vol. 157(C).
    4. Schabek, Tomasz, 2020. "The financial performance of sustainable power producers in emerging markets," Renewable Energy, Elsevier, vol. 160(C), pages 1408-1419.
    5. Will Gans & Beat Hintermann, 2013. "Market Effects of Voluntary Climate Action by Firms: Evidence from the Chicago Climate Exchange," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(2), pages 291-308, June.
    6. Martinho, Graça & Pires, Ana & Portela, Gonçalo & Fonseca, Miguel, 2015. "Factors affecting consumers’ choices concerning sustainable packaging during product purchase and recycling," Resources, Conservation & Recycling, Elsevier, vol. 103(C), pages 58-68.
    7. Ramakrishnan Ramanathan, 2018. "Understanding Complexity: the Curvilinear Relationship Between Environmental Performance and Firm Performance," Journal of Business Ethics, Springer, vol. 149(2), pages 383-393, May.
    8. Tolu Olarewaju & Samir Dani & Abdul Jabbar, 2023. "A Comprehensive Model for Developing SME Net Zero Capability Incorporating Grey Literature," Sustainability, MDPI, vol. 15(5), pages 1-18, March.
    9. Cho, Clare & Volpe, Richard J., "undated". "Independent Grocery Stores in the Changing Landscape of the U.S. Food Retail Industry," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258517, Agricultural and Applied Economics Association.
    10. Patrizia GAZZOLA & Gianluca COLOMBO, 2014. "Csr Integration Into The Corporate Strategy," CrossCultural Management Journal, Fundația Română pentru Inteligența Afacerii, Editorial Department, issue 2, pages 331-338, November.
    11. Jo-Ting Huang-Lachmann, 2019. "Systematic review of smart cities and climate change adaptation," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 10(4), pages 745-772, June.
    12. Volz Ulrich, 2022. "Climate-Proofing the Global Financial Safety Net," Journal of Globalization and Development, De Gruyter, vol. 13(1), pages 1-30, June.
    13. Riordan, Michael H. & Williamson, Oliver E., 1985. "Asset specificity and economic organization," International Journal of Industrial Organization, Elsevier, vol. 3(4), pages 365-378, December.
    14. Sarabia Escriva, Emilio José & Hart, Matthew & Acha, Salvador & Soto Francés, Víctor & Shah, Nilay & Markides, Christos N., 2022. "Techno-economic evaluation of integrated energy systems for heat recovery applications in food retail buildings," Applied Energy, Elsevier, vol. 305(C).
    15. Olarewaju, Tolu I.A. & Mickiewicz, Tomasz & Pawan Tamvada, Jagannadha, 2019. "The returns to occupations: The role of minimum wage and gender in Nigeria," World Development Perspectives, Elsevier, vol. 13(C), pages 75-86.
    16. Mehrabi, Zia & Delzeit, Ruth & Ignaciuk, Adriana & Levers, Christian & Braich, Ginni & Bajaj, Kushank & Amo-Aidoo, Araba & Anderson, Weston & Balgah, Roland A. & Benton, Tim G. & Chari, Martin M. & El, 2022. "Research priorities for global food security under extreme events," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 5(7), pages 756-766.
    17. Cho, Clare & Volpe, Richard, "undated". "Independent Grocery Stores in the Changing Landscape of the U.S. Food Retail Industry," Economic Research Report 265463, United States Department of Agriculture, Economic Research Service.
    18. Sun, Yongping & Yang, Ying & Huang, Nan & Zou, Xin, 2020. "The impacts of climate change risks on financial performance of mining industry: Evidence from listed companies in China," Resources Policy, Elsevier, vol. 69(C).
    19. Gillespie, Andrew, 2014. "Foundations of Economics," OUP Catalogue, Oxford University Press, edition 3, number 9780199674879.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Giovanni Felici & Daniele Codato & Alberto Lanzavecchia & Massimo De Marchi & Maria Cristina Lavagnolo, 2025. "Retail Development and Corporate Environmental Disclosure: A Spatial Analysis of Land-Use Change in the Veneto Region (Italy)," Sustainability, MDPI, vol. 17(15), pages 1-17, July.
    2. Parra-Domínguez, Javier & Dote-Pardo, Jairo, 2025. "Corporate sustainability and stock market dynamics: What challenges arise for future research?," Innovation and Green Development, Elsevier, vol. 4(5).
    3. Mazliza Azuana Abdullah & Arina Rus Zahira Rusli, 2025. "A Conceptual Analysis of the Relationship Between Environmental Strategy and Financial Performance," Information Management and Business Review, AMH International, vol. 17(1), pages 214-222.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sonia Boukattaya & Zyed Achour & Zeineb Hlioui, 2021. "Corporate Social Responsibility and Corporate Financial Performance: An Empirical Literature Review," Post-Print hal-03472433, HAL.
    2. Steves, Alexander & Cho, Clare & Metin, Çakır & Kong, Xiangwen & Boland, Michael, "undated". "The Food Retail Landscape Across Rural America," USDA Miscellaneous 311337, United States Department of Agriculture.
    3. Rachel Gillespie & Emily DeWitt & Stacey Slone & Kathryn Cardarelli & Alison Gustafson, 2022. "The Impact of a Grocery Store Closure in One Rural Highly Obese Appalachian Community on Shopping Behavior and Dietary Intake," IJERPH, MDPI, vol. 19(6), pages 1-12, March.
    4. Metin Çakır & Xiangwen Kong & Clare Cho & Alexander Stevens, 2020. "Rural Food Retailing and Independent Grocery Retailer Exits," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(5), pages 1352-1367, October.
    5. Rebecca Cleary & Lauren Chenarides, 2022. "Food retail profits, competition, and the Great Recession," Agribusiness, John Wiley & Sons, Ltd., vol. 38(3), pages 557-578, July.
    6. Rigoberto Lopez & Keenan Marchesi & Sandro Steinbach, 2024. "Dollar store expansion and independent grocery retailer contraction," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 46(2), pages 514-533, June.
    7. Clare Y. Cho & Jill K. Clark, 2020. "Disparities in Access to Supplemental Nutrition Assistance Program Retailers Over Time and Space," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 39(1), pages 99-118, February.
    8. Dong, Xiao & Byrne, Anne T. & Rhone, Alana & Ver Ploeg, Michele, 2025. "Review: untangling the complex economics of the local food retail environment," Food Policy, Elsevier, vol. 137(C).
    9. Edeoba William Edobor & Maria I. Marshall, 2021. "Earth, wind, water, fire and man: How disasters impact firm births in the USA," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 107(1), pages 395-421, May.
    10. Fitzpatrick, Katie & Greenhalgh-Stanley, Nadia & Ver Ploeg, Michele, 2019. "Food deserts and diet-related health outcomes of the elderly," Food Policy, Elsevier, vol. 87(C), pages 1-1.
    11. Aseem Kaul & Jiao Luo, 2018. "An economic case for CSR: The comparative efficiency of for‐profit firms in meeting consumer demand for social goods," Strategic Management Journal, Wiley Blackwell, vol. 39(6), pages 1650-1677, June.
    12. Kautish, Pradeep & Paço, Arminda & Thaichon, Park, 2022. "Sustainable consumption and plastic packaging: Relationships among product involvement, perceived marketplace influence and choice behavior," Journal of Retailing and Consumer Services, Elsevier, vol. 67(C).
    13. Kafigi Jeje, 2020. "Risk-Taking and Performance of Small and Medium-Sized Enterprises: Lessons from Tanzanian Bakeries," Journal of Economics and Behavioral Studies, AMH International, vol. 12(3), pages 1-22.
    14. Subramanian Rangan & Metin Sengul, 2009. "Information technology and transnational integration: Theory and evidence on the evolution of the modern multinational enterprise," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(9), pages 1496-1514, December.
    15. Wolfgang Burr, 2003. "Fundierung von Leistungstiefenentscheidungen auf der Basis modifizierter Transaktionskostenansätze," Schmalenbach Journal of Business Research, Springer, vol. 55(2), pages 112-134, March.
    16. Dong Sheng & Siyuan Jing & Xueqing He & Alexandra-Maria Klein & Heinz-R. Köhler & Thomas C. Wanger, 2024. "Plastic pollution in agricultural landscapes: an overlooked threat to pollination, biocontrol and food security," Nature Communications, Nature, vol. 15(1), pages 1-9, December.
    17. Zhang, Jiawei & Wang, Ruzhou & Ding, Yi & Liang, Fangzhi, 2025. "Can ESG ratings influence relationship-based transactions: Empirical evidence from Chinese listed companies," International Review of Financial Analysis, Elsevier, vol. 102(C).
    18. Jinyu Chen & Yan Yang & Qian Ding & Julan Xie, 2025. "Top Management Team Connectedness and Greenwashing," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 30(4), pages 3725-3743, October.
    19. Tian Luan, 2024. "A Review of Corporate Social Responsibility Decoupling and Its Impact: Evidence from China," Sustainability, MDPI, vol. 16(10), pages 1-17, May.
    20. Stienstra, Miranda, 2020. "The determinants and performance implications of alliance partner acquisition," Other publications TiSEM 7fdee0c2-d4d2-4f5b-95e3-2, Tilburg University, School of Economics and Management.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:16:y:2024:i:5:p:1785-:d:1343276. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.