Enterprise's Strategies to Improve Financial Capital under Climate Change Scenario – Evidence of the Leading Country

Abstract

AbstractThe threat of climate change poses manifold dangers for human health and well-being and the world’s ecosystems as well. One of the most widely accepted helpful measures to mitigate climate change-related risks is at the business or corporate level, aiming to reduce carbon dioxide emissions and innovate climate-friendly technology. However, doing so requires comprehensive factors, including legislation, company strategy, and finance. Using the Bayesian Mindsponge Framework (MBF) for analyzing 178 enterprises listed in the S&P 500 companies from 2016 to 2021, this paper examines how climate risk-mitigating efforts can affect their stock price and market value. The findings suggest that carbon dioxide emissions seriously affect stock price. In contrast, the income and mitigation strategies, including producing eco-friendly products, using renewable energy, and environmental expenditures investments, are positively associated with an increase in share value. However, such mitigation efforts are conditional on the income made by the company. Indicated here is that corporations must be able to transform financial capital from the stock market into bankable, climate-resilient projects. Based on these findings, we suggest that building an eco-surplus culture by stimulating climate change knowledge constitutes a promising approach to promoting a corporation’s mitigation efforts.