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Corporate GHG emissions and financial performance: A cross-country panel analysis of sectoral heterogeneity in advanced and emerging economies

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  • Marco A. Hernandez Vega

Abstract

As the urgency to address climate change intensifies, understanding the financial implications of corporate greenhouse gas (GHG) emissions reductions has become critical. This study examines the relationship between emissions reductions and corporate financial performance (CFP) in 513 companies across advanced and emerging market economies (EMEs) from 2010 to 2022. Using a standardized emissions score to mitigate inconsistencies in greenhouse gas reporting, this work analyzes how countries' development levels and sectoral dynamics influence the relationship between GHG emissions and financial outcomes using a panel-fixed effects model. The results are mixed: emissions reductions are positively associated with CFP in advanced economies and low-emitting sectors. However, in high-emitting industries, the association is negative. In contrast, in emerging market economies, the relationship is mixed across sectors, with positive associations concentrated in the Food, Beverages, and Tobacco, as well as the utilities sectors.

Suggested Citation

  • Marco A. Hernandez Vega, 2026. "Corporate GHG emissions and financial performance: A cross-country panel analysis of sectoral heterogeneity in advanced and emerging economies," Working Papers 2026-02, Banco de México.
    • Handle: RePEc:bdm:wpaper:2026-02
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    File URL: https://www.banxico.org.mx/publications-and-press/banco-de-mexico-working-papers/%7B57D3A770-2557-4289-CB46-E858FB24D488%7D.pdf
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    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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