The impact of greenhouse gas emissions and green innovation on corporate investors' financial performance: A systematic review

Abstract

In light of different environmental challenges, such as global climate warming, wildfires, as well as urban air and water pollution caused by GHG emissions, environmental awareness has emerged as a key factor influencing the way companies operate in the global economy. An eco-friendly culture has been increasingly spreading among stakeholders, governments, and institutions that have been lobbying companies to reduce environmental impacts from their production activities (Yu et al., 2017; Yu and Ramanathan, 2015); Although until a few decades ago, the reality is that industrial practitioners, environmental policymakers, academics, and business people largely ignored the environmental concerns arising from the assumption that the assets manufactured within their organizations had limited ecological impact. Therefore, environmental decline and degradation have emerged as a worldwide challenge (Sascha et al., 2020). From the academic perspective, scientists are steadily expanding their focus beyond general deliberation toward the development of green innovation and so on (Singh et al., 2020; Zhang et al., 2020).

Although there has been a wide survey of literature published on this subject reflecting many paradigms within which the firm stands at the heart of environmental accountability, it remains relevant to bring forward our reflections for further analysis. We find that green innovation mediates the link between environmental and financial performance. In accordance with our findings, we suggest that green innovation is a profitable strategy in the long run with a positive influence on the environmental and financial performances of a firm.

Keywords: Corporate Venture Capital, Green Innovation, GreenHouse Gas emissions, Corporate Social Responsibility, environmental performance.

JEL CODES: G24, O31, O34, Q51.

Article type: Theoretical article.