Corporate Decarbonization: Understanding CO2 Emission Drivers Across High- and Low-Polluting Firms in OECD Countries

Identifier:  imarina:9526294

Handle: https://hdl.handle.net/20.500.11797/imarina9526294

Authors:  Nimtz Y; Teruel M

Abstract:
Decarbonization of the economy is a central challenge in the fight against climate change. Although most governments show clear commitment to limiting global warming, the drivers of corporate decarbonization remain underexplored. Using a dataset of 1052 firms from OECD, this article analyses how intangible assets and environmental innovation affect corporate environmental performance. By applying bootstrapped quantile regressions, we show how firm- and country-level factors are associated with high- and low-polluting firms. Our results suggest that intangible assets and environmental innovation improve environmental performance across quantiles, with a stronger effect for high-polluting firms. Furthermore, environmental innovation can reduce short-term emission growth. Finally, intangible assets depend on the sectorial CO2 intensity and have limited significance in sectors with low carbon intensity. At the policy level, our results call for emission-related regulation because it improves corporate decarbonization. Furthermore, it is necessary to have a regulatory strategy that incorporates incentives for intangible asset development and innovation, differentiating between high- and low-polluting firms.