Enterprise's Strategies to Improve Financial Capital under Climate Change Scenario – Evidence of the Leading Country

27 Pages Posted: 9 Feb 2023

See all articles by Quang Loc Nguyen

Quang Loc Nguyen

SP Jain School of Global Management

Minh-Hoang Nguyen

Centre for Interdisciplinary Social Research, Phenikaa University ; Ritsumeikan Asia Pacific University

Viet-Phuong La

Phenikaa University

Ishaq Bhatti

La Trobe University - School of Economics and Finance; Financial Research Network (FIRN)

Quan Hoang Vuong

Université Libre de Bruxelles (ULB) - Solvay Brussels School of Economics and Management; Phenikaa University

Date Written: February 8, 2023

Abstract

Climate change poses manifold consequences to human well-being as well as ecosystems. One of the most widely accepted measures to mitigate climate risks is at the firm level, aiming to reduce carbon dioxide and innovate climate-friendly technology. However, doing so requires comprehensive factors, including legislation, the company’s strategy, and finance. Using the Bayesian Mindsponge Framework (MBF) for analyzing 178 enterprises listed in S&P 500 companies from 2016 to 2021, the current study examined how their climate risk mitigation efforts can affect their stock price. We found that emitted carbon dioxide negatively affects the stock price. In contrast, the income and mitigating strategies, including producing eco-friendly products, using renewable energy, and environmental expenditures investments, are positively associated with the increase in share value. However, the mitigation efforts are conditional on the income of the company. The results indicate that investors expect corporations to transform financial capital from the stock market into bankable, climate-resilient projects. Based on these findings, we suggest that building an eco-surplus culture by stimulating climate change knowledge can be a promising approach to promoting a corporation’s mitigation efforts.

Keywords: corporate, climate change, eco-surplus, stock price

Suggested Citation

Nguyen, Quang Loc and Nguyen, Minh-Hoang and La, Viet-Phuong and Bhatti, Ishaq and Vuong, Quan Hoang, Enterprise's Strategies to Improve Financial Capital under Climate Change Scenario – Evidence of the Leading Country (February 8, 2023). Available at SSRN: https://ssrn.com/abstract=4351342 or http://dx.doi.org/10.2139/ssrn.4351342

Quang Loc Nguyen (Contact Author)

SP Jain School of Global Management ( email )

Minh-Hoang Nguyen

Centre for Interdisciplinary Social Research, Phenikaa University ( email )

Hanoi
Vietnam

Ritsumeikan Asia Pacific University ( email )

Beppu
Japan

Viet-Phuong La

Phenikaa University ( email )

To Huu road, Yen Nghia
Ha Dong district
Hanoi, 100803
Vietnam

Ishaq Bhatti

La Trobe University - School of Economics and Finance ( email )

Bundoora
Melbourne, 3086
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Quan Hoang Vuong

Université Libre de Bruxelles (ULB) - Solvay Brussels School of Economics and Management ( email )

ULB CP 145/01
21 Ave. F.D. Roosevelt
Brussels, Bruxelles 1050
Belgium
+32-2-6504864 (Phone)
+32-2-6504188 (Fax)

HOME PAGE: http://www.ceb-ulb.com/vuong-quan-hoang.html

Phenikaa University ( email )

To Huu road, Yen Nghia
Ha Dong district
Hanoi, Hanoi 100803
Vietnam

HOME PAGE: http://sites.google.com/site/vuongqh2019/

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