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Moderation of Clean Energy Innovation in the Relationship between the Carbon Footprint and Profits in CO₂e-Intensive Firms: A Quantitative Longitudinal Study
Porles-Ochoa, F.; Guevara, R. Moderation of Clean Energy Innovation in the Relationship between the Carbon Footprint and Profits in CO₂e-Intensive Firms: A Quantitative Longitudinal Study. Sustainability2023, 15, 10326.
Porles-Ochoa, F.; Guevara, R. Moderation of Clean Energy Innovation in the Relationship between the Carbon Footprint and Profits in CO₂e-Intensive Firms: A Quantitative Longitudinal Study. Sustainability 2023, 15, 10326.
Porles-Ochoa, F.; Guevara, R. Moderation of Clean Energy Innovation in the Relationship between the Carbon Footprint and Profits in CO₂e-Intensive Firms: A Quantitative Longitudinal Study. Sustainability2023, 15, 10326.
Porles-Ochoa, F.; Guevara, R. Moderation of Clean Energy Innovation in the Relationship between the Carbon Footprint and Profits in CO₂e-Intensive Firms: A Quantitative Longitudinal Study. Sustainability 2023, 15, 10326.
Abstract
The purpose of this research was to analyze the moderating effect of clean energy innovation on the relationship between corporate carbon footprint and corporate profits in those industrial sectors associated with high demand for fossil fuels in which it is "hard to abate" CO₂e emissions. It used a longitudinal research design, in particular a panel study under a structural equation modeling (SEM) approach, based on partial least squares. For the longitudinal moderation analysis, this research employed the Bayesian method by defining a multiple-indicator latent growth curve model (B-LGC model). A global sample was used consisting of 7,827 firm-year observations between 2015 and 2021 corresponding to 167 international firms. The results revealed a very significant impact of the corporate carbon footprint on corporate profits. Likewise, the results showed that innovations in clean energy, when measured as the consumption of renewable energy, positively moderates the relationship between the greenhouse gas emissions from the value chain associated with Scope 3 of the Greenhouse Gas (GHG) Protocol, and the gross profit margin obtained. Besides the academic contribution represented by the moderating effect of clean energy innovation, these findings imply that a more detailed understanding of the emissions of the entire value chain (Scope 3 CO₂e) by executives and managers of high emitting CO₂e companies represents an effective mechanism to obtain higher profits, create competitive advantages and, at the same time, achieve a net zero emissions strategy. More importantly, public policy makers will be able to use these results to revise CO₂e-related policies paying more attention to the Scope 3 CO₂e emissions produced by these companies, to formulate regulatory and control mechanisms that stimulate clean energy innovation.
Keywords
clean energy innovation; corporate carbon footprint; corporate profits; high CO₂e emissions; longitudinal model panel; latent growth curve (LGC)
Subject
Social Sciences, Other
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
