The Impacts Of Environmental Policies On Business Performance Evidence From European And Chinese Enterprises

Europe and China are responsible of the half of global emissions of greenhouse gases.Hence,their environmental policies not only have a strong influence in their development,but also affect the global sustainable development and their equilibrium.However,since the first wave of environmental policies there are been concerns about their impacts on business performance.Business and policy makers have been struggling for the right balance between environmental performance and business performance.Yet we still lack a more complete understanding of the nature of the impacts of environmental regulations on business.This study contributes to fill that gap by exploring the relationship between environmental performance and business and financial performance of companies.Building on Porter & Kramer competitive advantage and corporate social responsibility theory,the impacts of environmental regulations business and financial performances were investigated in this research thesis.Given importance to the financial aspect of companies(measured with profitability ratios ROA and ROE)and direct environment performance measures,data from ten European and Chinese CSR enterprises covering the time 2014-2018 was analyzed using a combination of test methods.Results show that the environmental factors significantly and in long term positively influence the financial performance of companies in the overall industrial sectors.Consequently,the employees are more satisfied and committed to work in a well-designed CSR company and create value for the company and generate profits.In addition,analyzing the relationship between environmental performance and business performances,the different emphasis and approaches of European and Chinese companies concerning environmental regulations and the impacts on their performances were identified.While the European pioneer in environmental regulations focuses more on the economic and competitive advantages,China,on the other hand,has been trying to find a low-impact development pattern after its rapid economic growth focusing more on the pollution-control.Finally,in this research thesis the Eu-China bilateral cooperation on environment was promoted and an acceleration of their efforts and implementation of new environmental regulations which drive green innovation was encouraged.