| Abstract: | Superior corporate environmental performance (CEP) has become essential to the competitive advantage and financial success of businesses. However, the main reasons managers pay attention to environmental performance are improved reputation in the capital market and profitability, as well as reductions in operating costs and risks. This article describes the findings of a study that examines the relationship between CEP, using a reduction of carbon dioxide (CO2) emissions as a measure, and corporate risk taking. In addition to indicating a significant negative relationship between CEP and firm risk, the study results also show that a 1% improvement of CEP decreases corporate risk by 3%. |
