Our study of 267 U.S. firms shows that improved environmental risk management is associated with a lower cost of capital. Our findings provide an alternative perspective on the environmental-economic performance relationship, which has been dominated by the view that improvements in economic performance stem from better resource utilization. Firms also benefit from improved environmental risk management through a reduction in their cost of equity capital, a shift from equity to debt financing, and higher tax benefits associated with the ability to add debt.
Links:
[1] http://admin.indiaenvironmentportal.org.in/feature-article/environmental-risk-management-and-cost-capital
[2] http://admin.indiaenvironmentportal.org.in/category/author/mark-p-sharfman
[3] http://admin.indiaenvironmentportal.org.in/category/author/chitru-s-fernando
[4] http://admin.indiaenvironmentportal.org.in/category/journal/strategic-management-journal
[5] http://admin.indiaenvironmentportal.org.in/category/thesaurus/environment
[6] http://admin.indiaenvironmentportal.org.in/category/thesaurus/industry
[7] http://admin.indiaenvironmentportal.org.in/category/thesaurus/united-states-america-us
[8] http://admin.indiaenvironmentportal.org.in/category/thesaurus/market-based-instruments
[9] http://admin.indiaenvironmentportal.org.in/category/thesaurus/environment-management