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dc.contributor.authorTrinks, Arjan
dc.contributor.authorMulder, Machiel
dc.contributor.authorScholtens, Bert
dc.identifier.citationTrinks , A , Mulder , M & Scholtens , B 2020 , ' An efficiency perspective on carbon emissions and financial performance ' , Ecological Economics , vol. 175 , 106632 .
dc.identifier.otherPURE: 266558701
dc.identifier.otherPURE UUID: 180b9226-00e5-404b-88aa-ae906b343438
dc.identifier.otherORCID: /0000-0001-5774-5191/work/75248640
dc.identifier.otherScopus: 85085603202
dc.identifier.otherWOS: 000539110100001
dc.description.abstractInternational policy actions to constrain carbon emissions create substantial risks and opportunities for firms. In particular, production processes that are relatively high emitting will be more sensitive to uncertain costs of emitting carbon dioxide and might further reflect productive inefficiencies. We employ a productive efficiency model to evaluate firms’ carbon emission levels relative to those of best practice (efficient) peers with comparable production structures. By accounting for total factor productivity and sector-relative performance aspects, this measure of carbon efficiency helps to quantify and rank firms’ relative dependency on carbon in the production process. We investigate the impact of carbon efficiency on various financial performance outcomes, and evaluate the role of general resource efficiency in explaining these impacts. Using an international sample of 1,572 firms over the years 2008-2016, we find superior financial performance in carbon efficient (best-practice) firms. On average, a 0.1 higher carbon efficiency is associated with a 1.0% higher profitability and 0.6% lower systematic risk. While carbon efficiency closely relates to resource efficiency, it also has distinct financial performance impacts, particularly lowering systematic risk. Overall, our findings suggest that carbon efficient production can be valuable from both operational and risk management perspectives.
dc.relation.ispartofEcological Economicsen
dc.rightsCopyright © 2020 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY license (
dc.subjectCarbon efficiencyen
dc.subjectFinancial performanceen
dc.subjectTotal factor productivityen
dc.subjectData envelopment analysisen
dc.subjectDirectional distance functionen
dc.subjectHD28 Management. Industrial Managementen
dc.subjectHG Financeen
dc.titleAn efficiency perspective on carbon emissions and financial performanceen
dc.typeJournal articleen
dc.description.versionPublisher PDFen
dc.contributor.institutionUniversity of St Andrews.Centre for Responsible Banking and Financeen
dc.contributor.institutionUniversity of St Andrews.School of Managementen
dc.description.statusPeer revieweden

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