Corporate Performance under Carbon Pressure: The Role of CO2 Emissions and Management in Asean Firms

Climate change and environmental pollution have become serious issues that need to be addressed. In this context, this study analyses the impact of CO2 emissions management on the financial performance of enterprises in four Southeast Asian countries, namely Vietnam, Cambodia, the Philippines and Singapore. Using an OLS regression model, the study focuses on two environmental indicators: actual CO2 emissions and CO2 emissions management strategies such as emissions control, energy efficiency improvement and green innovation. The result show that CO2 emissions and financial performance have an positively corelated: enterprises with high emissions tend to have lower profits. In contrast, enterprises that adopt effective emissions management measures such as emissions reduction and energy saving tend to achieve better financial results, especially in countries with strict environmental policies. This study contributes to both the academic literature on emissions management and provides specific evidence for the Southeast Asia region – which is lacking in global climate finance studies. At the same time, the study provides recommendations for managers and government agencies in promoting sustainable development linked to financial performance. Research purpose: The purpose of this study is to assess the impact of CO2 emissions and emissions management measures on the financial performance of enterprises in four ASEAN countries (Vietnam, Cambodia, Philippines and Singapore), to determine whether environmental policy compliance creates risks or competitive advantages for enterprises. Research motivation: The study is motivated from the urgent need to address climate change and the lack of empirical evidence on the relationship between CO2 emissions management and corporate financial performance in the context of ASEAN countries strengthening environmental policies. Research design, approach, and method: The study uses a quantitative approach with OLS regression models, based on survey data in four ASEAN countries. The main variables include CO2 emissions index (Scope 2), emissions management index, and financial performance which is return on sales (ROS), along with control variables such as size, age, labor productivity, and industry. Main findings: The results illustrates that CO2 emissions are positively associated with ROS, implying short-term gains from emission growth linked to business expansion. In contrast, proactive carbon management (CM) improves both ROS and ROE, highlighting the benefits of energy efficiency and sustainability practices. Labor efficiency (LE) enhances profitability, while labour growth (LG) reduces it without productivity improvements. Firm size has mixed effects—negative for ROS in pooled models, positive with fixed effects, but consistently lowers ROE due to capital intensity. Overall, the findings emphasize that while emissions may yield temporary gains, long-term value comes from carbon management and operational efficiency. Practical/managerial implications: The results of the study provide practical evidence for managers and policymakers that investing in CO2 emissions management not only helps to comply with environmental regulations but also improves financial performance. Enterprises should integrate sustainable development strategies into their core operations to enhance competitiveness, while governments should promote supporting mechanisms such as carbon taxes and green incentives.