Relationship Between Environmental Performance and Financial Performance: an Empirical Analysis of Japanese Corporations

摘要

The hypotheses that a firm's environmental performance has a positive impact on its financial performance and vice versa are statistically supported by Japanese data. However, this tendency for two-way positive interaction appears to be only a relatively recent phenomenon. The tendency for realizing the two-way interaction is not limited to the top-scoring firms in terms of both financial and environmental performance. On the contrary, this is also a trend that can be observed fairly generally. Obviously, when we consider only scores of those companies that published the relevant information in their environmental reports, and conduct the statistical causality test with such information as additional input to the pooled time-series and cross-section data of financial performance, the results become more strongly significant. From the recent experience of environmental policies in Japan, we infer that information-based environmental policy measures are effective to encourage the ongoing transition toward a more sustainable market economy.