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Impact of Corporate Environmental Responsibilities on Financial Performance

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This research investigates the nexus between corporate environmental responsibilities and financial performance within the oil, gas, mineral, and metal mining sector. Aiteo Groups and Sahara Groups are utilized as case studies to probe the influence of environmental policies on financial performance. Employing theoretical frameworks and financial metrics such as return on equity, return on assets, and stock market performance, the study aims to elucidate the impact of environmental responsibilities on financial outcomes. The results reveal a nuanced relationship between the financial performance of Aiteo Group and Sahara Group and their commitment to corporate environmental responsibility. The results showed that managers' environmental a􀄴itude is a good predictor of corporate reputation, with R squared and adjusted R squared of 0.519 and 0.489 respectively and a significant linear relationship at the 1% level. While a positive correlation is identified between financial performance and robust environmental practices, there is evidence that short-term financial performance may be negatively impacted by environmental activities. Environmental, social, and governance (ESG) factors should be integrated into investment choices, as these studies highlight. These findings have consequences for managers, investors, and politicians. Moreover, the study uncovers a noteworthy correlation between corporate reputation and environmental a􀄴itudes among managers in the extractive industries.

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  • James Oladejo, Olusola, 2023. "Impact of Corporate Environmental Responsibilities on Financial Performance," Multidisciplinary Journal of Social Sciences, Association of Forensic Accounting Researchers (AFAR), vol. 3(1), pages 113-134, June.
    • Handle: RePEc:ris:amjoss:0006
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