Impact of Firms’ Profitability on Environmental Performance: Evidence from Companies in India

Abstract

The issues relating to the environment are the main talking points in the present world. Many natural calamities like global warming, cautioned the world community to protect the globe from the environmental degradation. This situation compelled the corporates to involve themselves in responsible activities and disclose their environmental performance in their Annual Report. Many research works explain the different dimensions of environment issue. This study makes an attempt to analyse the impact of profitability on environmental performance of the firm. The analysis has made use of descriptive statistics, correlation, and regression analysis. The results found that the profitability variables like ROA, ROE, and ROS create the positive impact on energy intensity (proxy of environmental performance) of the sample firms. At the same time, one profitability variable such as ROCE recorded negative impact on EI. This paper offers useful suggestions to the corporates to reduce the level of energy intensity and to utilize the companies’ capital for sustainable performance.

DOI: 10.5901/mjss.2015.v6n1p109