Research On The Impact Of Environmental Costs On Financial Performance

As the pace of our economic development has accelerated,the market competition has intensified.Companies need to keep chasing the pace of economic development in order to find their place in the fierce market competition.In the pursuit,some companies have caused serious environmental problems at the expense of the environment.As a major producer of environmental issues,but also for profit,how the cost of environmental protection does affect the financial performance of the enterprise.The academic community has different views on this issue,but there are two main ideas:the scholars who support the principle of profit maximization believe that improve environmental performance of the extra cost will reduce the enterprise's financial performance;however,some scholars argue that the environmental cost will improve the financial performance.So clarify the relationship between them,is the key to the enterprise.This paper is a research object based on the a-share listed company in Shanghai and Shenzhen.Through the social responsibility report,the report on sustainable development,and the environmental report,which was disclosed by the listed companies between 2010 and 2015,a total of 156 sample companies were screened.By building an empirical model,the relationship between the environmental cost and financial performance of the sample company is analyzed empirically.Through analysis,eventually come to the conclusion:there is a relationship between enterprise environmental cost and corporate financial performance;the current environmental cost will have an adverse impact on financial performance;the environmental costs of earlier period can promote the financial performance.In the last part,the author put forward the proposals following:improve the consciousness of environmental protection of enterprises;improve the environmental laws regulations;use "environmental responsibility" marketing tool and so on.