Do environmental and emission disclosure affect firms' performance? Evidence from sectorial micro data

This study analyzes the relationship between frms’ fnancial performance and their environmental performance, with a particular focus on greenhouse gas-intensive industries. Using fnancial and environmental data of international listed companies from 2011 to 2017, the fnancial impact of environmental performances was estimated, measured with multiple indicators that take into account disclosure aspects. The analysis was conducted across diferent industry aggregation levels, namely the entire group of industries, the Global Industry Classifcation System (GICS) Industry Group, and the GICS Industry. We found that environmental disclosure indexes are mostly not signifcant after controlling for environmental performance, suggesting that the efect of environmental disclosure on corporate fnancial performance is limited, if not altogether absent. In contrast, environmental performance seems to play an important role, and that holds even for high-emitting companies. Overall, our results were consistent with the interpretation that fnancial markets efectively consider the actual environmental performance of listed companies and, only to a minor extent, the quality of their disclosure.