Correlations between Corporate Climate Change Management and Financial Performance: A Case Study of Japanese Automobile Manufacturers

Abstract

Using data from a survey, we examined actions taken by large corporations based in three countries to combat climate change and related these actions to the corporations’ financial performance. We analyzed the correlation between financial performance and climate change management performance to determine the extent that climate change management activities are a net cost or a net benefit to companies. We found that corporate climate change management performance is generally positively correlated with financial performance, but that the relationship differs among countries due to national-level external factors. A case study of Japanese automobile manufacturing companies showed that sales of a company ’ s fuel-efficient cars, reflecting consumers ’ awareness of climate change, are associated with higher valuation by financial markets.