Environmental performance as a strategic driver of financial outcomes: A mixed-methods analysis

Background: This study arises from the need to deepen our understanding of the impact of environmental performance on the financial performance of companies in the Brazilian capital market. Purpose: The general objective of this study was to analyze the influence of the Environment and Climate Change dimensions on the financial performance of companies listed on the Corporate Sustainability Index (ISE). Method: The study was divided into two methodological phases, descriptive in nature and quantitative and qualitative in approach, respectively. In the quantitative phase of the study, Pearson correlation and multiple linear regression techniques were used. In the qualitative stage, content analysis was carried out on the findings of the semi-structured interviews conducted. Results: The results of the first phase of the research showed that the performance of the Environment dimension has a positive and statistically significant influence, but with a low magnitude of effect size, on the profitability indicators ROA and ROE of the listed companies. In the second phase of the research, it was identified that managers recognize the impact of environmental management practices on the financial result, highlighting the related risks and opportunities, the organizational image, reputation and competitiveness, as well as the barriers that still exist in implementing more environmentally sound practices integrated with financial aspects. Conclusions: The study's innovative nature is noteworthy in its proposal to conduct a mixed-approach study with a view to understanding the relationship between environmental and financial performance, an initiative that has been little identified in previous studies. In addition, the companies analyzed belong to the ISE, one of the main benchmarks of the Brazilian capital market.