Exploring the Impact of Environmental Factors on Performance: Empirical Evidence for FTSE100 Companies
DOI:
https://doi.org/10.5377/reice.v12i24.20111Keywords:
Return on assets, return on equity, environment, emissionsAbstract
The purpose of this article is to investigate if certain environmental factors affect performance, with a focus on asset and equity profitability. The issue being addressed is extensively topical, given the current circumstances surrounding environmental concerns and sustainability. Studies that analyze how environmental factors such as pollutant emissions or natural resource use are essential for understanding the long-term impact of economic activities on the environment and society. This provides , providing valuable information for developing more sustainable and environmentally responsible practices and , but also helps to increase the company's performance and image. A sample of companies from the United Kingdom belonging to the FTSE100 stock index is used across a 10-year period10 years, from 2015 to 2024. The quantitative framework incorporates a variety of variables, including performance, indebtedness, liquidity, resource usage factors, and variables related to emissions. The econometric methodology uses the ordinary least squares method to investigate existing interactions, implementing regression models without effects and models with fixed and random effects. Environmental factors have a significant influence on ROA and ROE, according to estimates from several multiple regression modelsAccording to estimates from several multiple regression models, environmental factors have a significant influence on ROA and ROE. Thus, total CO2 emissions, NOx emissions, and expenditures for environmental protection are statistically significant and negatively impact ROA and ROE, while the total renewable energy has a positive influence.
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