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Aligning Carbon Emission Reduction Initiatives with Financial
Performance in the Mining Industry: A Behavioral Analysis
Fdson Charikinya, Margreth Tadie
Stellenbosch University
Frank Brück, Matteo Burato
Imperial College London
ABSTRACT: This study explores the relationship between carbon reduction-focused sustainability behaviors
and financial performance in the mining sector. Previous work by Cenci et al. (2023) categorized sustainability
behaviors by activity type and targeted Sustainable Development Goal (SDG). Leveraging data from GOLDEN
Sustainability and Bloomberg databases, the study analyzes 30 mining entities from 2010 to 2021 through
panel regression. Findings reveal that company size, asset modifications, and associations positively impact
Return on Assets (ROA), while energy efficiency and incentives show negative effects. Conversely, company size
and new products negatively impact Tobin’s Q ratio, with energy efficiency having a borderline negative effect.
Notably, assessment and measurement activities emerge as key contributors to improved financial performance.
These findings suggest that strategically aligning carbon reduction behaviors with financially beneficial practices
can enhance performance. The results offer valuable guidance for policymakers and the mining industry,
encouraging the adoption of impactful and financially viable sustainability initiatives.
INTRODUCTION
The link between corporate environmental practices and
financial performance remains a subject of ongoing debate
(Busch et al., 2020 Gao et al., 2023). While global aware-
ness of environmental sustainability grows, the specific
effects of carbon reduction efforts on financial performance
remain unclear (Diaye et al., 2022). This study explores this
gap within the context of the mining industry, a significant
contributor to global emissions (Van Vuuren et al., 2018).
Corporate sustainability, encompassing environmen-
tal, social, and governance (ESG) factors, offers a frame-
work for understanding these relationships (Eccles et al.,
2014). This study focuses on the environmental aspect,
specifically carbon emission reduction practices (Figure 1).
By analyzing their impact on financial performance, we aim
to elucidate industry-specific dynamics and potential trade-
offs between sustainability and profitability (Eccles et al.,
2014 Rela et al., 2020)
The mining industry faces unique challenges in balanc-
ing environmental responsibility with financial viability
(Abban &Hasan, 2021 Sun et al., 2020). Understanding
the intricate relationship between carbon reduction behav-
iors and financial performance is crucial for navigating
these pressures and adopting sustainable practices. This
study investigates the association between specific carbon
reduction behaviors and financial performance in the min-
ing industry.
Aligning Carbon Emission Reduction Initiatives with Financial
Performance in the Mining Industry: A Behavioral Analysis
Fdson Charikinya, Margreth Tadie
Stellenbosch University
Frank Brück, Matteo Burato
Imperial College London
ABSTRACT: This study explores the relationship between carbon reduction-focused sustainability behaviors
and financial performance in the mining sector. Previous work by Cenci et al. (2023) categorized sustainability
behaviors by activity type and targeted Sustainable Development Goal (SDG). Leveraging data from GOLDEN
Sustainability and Bloomberg databases, the study analyzes 30 mining entities from 2010 to 2021 through
panel regression. Findings reveal that company size, asset modifications, and associations positively impact
Return on Assets (ROA), while energy efficiency and incentives show negative effects. Conversely, company size
and new products negatively impact Tobin’s Q ratio, with energy efficiency having a borderline negative effect.
Notably, assessment and measurement activities emerge as key contributors to improved financial performance.
These findings suggest that strategically aligning carbon reduction behaviors with financially beneficial practices
can enhance performance. The results offer valuable guidance for policymakers and the mining industry,
encouraging the adoption of impactful and financially viable sustainability initiatives.
INTRODUCTION
The link between corporate environmental practices and
financial performance remains a subject of ongoing debate
(Busch et al., 2020 Gao et al., 2023). While global aware-
ness of environmental sustainability grows, the specific
effects of carbon reduction efforts on financial performance
remain unclear (Diaye et al., 2022). This study explores this
gap within the context of the mining industry, a significant
contributor to global emissions (Van Vuuren et al., 2018).
Corporate sustainability, encompassing environmen-
tal, social, and governance (ESG) factors, offers a frame-
work for understanding these relationships (Eccles et al.,
2014). This study focuses on the environmental aspect,
specifically carbon emission reduction practices (Figure 1).
By analyzing their impact on financial performance, we aim
to elucidate industry-specific dynamics and potential trade-
offs between sustainability and profitability (Eccles et al.,
2014 Rela et al., 2020)
The mining industry faces unique challenges in balanc-
ing environmental responsibility with financial viability
(Abban &Hasan, 2021 Sun et al., 2020). Understanding
the intricate relationship between carbon reduction behav-
iors and financial performance is crucial for navigating
these pressures and adopting sustainable practices. This
study investigates the association between specific carbon
reduction behaviors and financial performance in the min-
ing industry.
