Carbon emissions and firm value: does firms’ commitment to sustainable development goals matter?

Purpose This study aims to clarify the value of sustainable development goals (SDGs) commitment by examining the moderating role of firms’ commitment to SDGs on firms’ carbon emissions (CE) and firm value (FV) nexus. Design/methodology/approach The study uses ordinary least squares and other robust estimations on data from 89 listed firms on the Johannesburg Stock Exchange (JSE) from 2013 to 2021. Findings Firms with high CE are associated with lower FV. However, firms’ commitment to SDGs moderates the relationship by averting the value-destroying tendencies of high carbon-emitting firms. Practical implications Firms should integrate SDGs into their core business strategy and governance frameworks to enhance their environmental performance and FV. As market participants on the JSE, they should also focus on the allocation of resources for SDGs and the management of CE. Social implications The findings provide a basis for governments and policymakers to promote firm-level commitment to SDGs to help reduce the harmful effects of CE on society and help achieve SDG targets. Originality/value The study adds a new dimension to the existing environmental performance and financial outcomes literature by clarifying the moderating value of firms’ commitment to SDGs in the CE and FV discourse.