IMPACT OF RENEWABLE ENERGY INVESTMENT ON STOCK MARKET PERFORMANCE: EVIDENCE FROM SOUTH AFRICAN LISTED ENERGY FIRMS

The global transition to sustainable energy is reshaping corporate investment strategies and investor behavior, especially in emerging markets like South Africa. As environmental accountability gains momentum, energy firms are increasingly investing in renewable energy assets. This study investigates the impact of renewable energy investment measured by capital expenditure on renewables, government subsidies, and carbon emission reductions on the stock performance of South African energy firms listed on the Johannesburg Stock Exchange (JSE). A quantitative longitudinal design is employed, covering firm-level data from 2010 to 2023. The dependent variable, stock performance, is measured using annual stock return, while independent variables include renewable energy capital expenditure, government green subsidies, and CO₂ emission reductions (measured via emissions intensity metrics). Data are obtained from annual financial reports, sustainability disclosures, and Bloomberg ESG databases. Analytical procedures are conducted using Stata 17, including descriptive statistics, a correlation matrix, and OLS regression to estimate the relationship between renewable energy investment and stock returns. Diagnostic tests are performed to confirm the robustness of the model, including normality, multicollinearity, and heteroscedasticity assessments. Preliminary results indicate a positive and significant relationship between renewable energy investments and stock performance, particularly for firms receiving higher government subsidies and reporting substantial emission reductions. Capital allocation toward green assets appears to enhance investor confidence and firm valuation. The study concludes that renewable energy initiatives can be a strategic asset for shareholder value creation. It recommends that firms intensify their low-carbon investment strategies and leverage policy incentives to enhance both environmental and financial performance.