The impact of profitability on scope 1, 2 and 3 GHG emissions in Europe

Hohens ein, Yannick
A icle
The impac o p o i abili y on scope 1, 2 and 3 GHG
emissions in Eu ope
Junio Managemen Science (JUMS)
P o ided in Coope a ion wi h:
Junio Managemen Science e. V.
Sugges ed Ci a ion: Hohens ein, Yannick (2025) : The impac o p o i abili y on scope 1, 2 and 3 GHG
emissions in Eu ope, Junio Managemen Science (JUMS), ISSN 2942-1861, Junio Managemen
Science e. V., Planegg, Vol. 10, Iss. 2, pp. 292-333,
h ps://doi.o g/10.5282/jums/ 10i2pp292-33
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Junio Managemen Science 10(2) (2025) 292-333
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ISSN: 2942-1861
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DOMINIK VAN AAKEN
Ad iso y Edi o ial Boa d:
FREDERIK AHLEMANN
JAN-PHILIPP AHRENS
THOMAS BAHLINGER
MARKUS BECKMANN
SULEIKA BORT
ROLF BRÜHL
KATRIN BURMEISTER-LAMP
CATHERINE CLEOPHAS
NILS CRASSELT
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MATTHIAS FINK
DAVID FLORYSIAK
GUNTHER FRIEDL
MARTIN FRIESL
FRANZ FUERST
WOLFGANG GÜTTEL
NINA KATRIN HANSEN
ANNE KATARINA HEIDER
CHRISTIAN HOFMANN
SVEN HÖRNER
STEPHAN KAISER
NADINE KAMMERLANDER
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ALEKSANDRA KLEIN
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DODO ZU KNYPHAUSEN-AUFSESS
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ARJAN KOZICA
CHRISTIAN KOZIOL
MARTIN KREEB
WERNER KUNZ
HANS-ULRICH KÜPPER
MICHAEL MEYER
JÜRGEN MÜHLBACHER
GORDON MÜLLER-SEITZ
J. PETER MURMANN
ANDREAS OSTERMAIER
BURKHARD PEDELL
ARTHUR POSCH
MARCEL PROKOPCZUK
TANJA RABL
SASCHA RAITHEL
NICOLE RATZINGER-SAKEL
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ANDREAS G. SCHERER
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DAVID SEIDL
THORSTEN SELLHORN
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MATTHIAS UHL
CHRISTINE VALLASTER
PATRICK VELTE
CHRISTIAN VÖGTLIN
BARBARA E. WEISSENBERGER
ISABELL M. WELPE
HANNES WINNER
THOMAS WRONA
THOMAS ZWICK
Volume 10, Issue 2, June 2025
JUNIOR
MANAGEMENT
SCIENCE
Yannick Hohens ein,The Impac o P o i abili y on Scope 1, 2
and 3 GHG Emissions in Eu ope
Gün he Gampe , Small bu Powe ul: The Impac o Shel
Talke Flags on Consume Shopping Beha io
Sebas ian Lüpni z,Un a elling Collec i e Ac ion F ames
Th ough a Tempo al Lens: A Case S udy o an
En i onmen al Mo emen in Ge many
Mohammad Izza Raihan Im on, Sus ainabili y in he
Co po a e Sec o : A News Tex ual Analysis App oach
o Measu ing ESG Pe o mance
Eli Leman Bilgin, Unde s anding Eme gen Leade ship Ac oss
Cul u al Le els: A Theo e ical F amewo k
Nicolas Fiedle , Analyzing he Re ail Gasoline Ma ke in
Ge many: Impac o Spa ial Compe i ion and Ma ke
Concen a ion on P ices
Sebes yén And ás Huszá , The Role o Hie a chical
Di e en ia ion o he E ec i eness o Socce Teams
Hashma ullah Sadid, Wai ing Time Es ima ion o Ride-Hailing
Flee s Using G aph Neu al Ne wo ks
Licia Recke sd ees, Gone, Space Gone -Non-Te i o ial
Wo kplace Models in he Con ex o Hyb id Wo king
F om he Employees' Pe spec i e
Timo And eas Delle , Explo ing Disc epancies in Ene gy
Pe o mance Ce i ica es: Analyzing Ene gy E iciency
P emiums o Buildings Based on Theo e ical Ene gy
Requi emen s Ve sus Ac ual Ene gy Consump ion
292
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Published by Junio Managemen Science e.V.
This is an Open Access a icle dis ibu ed unde he e ms o he CC-BY-4.0
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ISSN: 2942-1861
The Impac o P o i abili y on Scope 1, 2 and 3 GHG Emissions in Eu ope
Yannick Hohens ein
Uni e si y o S .Gallen
Abs ac
This hesis examines he e ec o co po a e p o i abili y on he le els o g eenhouse gas (GHG) emissions, speci ically analyz-
ing Scope 1, 2, and 3 emissions o Eu opean companies lis ed on he STOXX Eu ope 600 index om 2017 o 2023. Gi en
inc easing egula o y p essu es, inconclusi e e idence on whe he p o i abili y d i es sus ainabili y, and po en ial bidi ec ional
causali y, esea ching his ela ionship is highly ele an . Using a sys ema ic li e a u e e iew (SLR) and ixed-e ec s eg es-
sions, his hesis in es iga es his ela ionship. Resul s show p o i abili y, measu ed by e u n on asse s (ROA), nega i ely
co ela es wi h Scope 3 emissions, sugges ing highe p o i s may p omo e sus ainabili y. Howe e , no signi ican co ela ion
exis s o Scope 1 and 2 emissions, excep o a posi i e link wi h Scope 2 emissions in low-emission sec o s. High-emission
indus ies show s onge model explana o y powe , indica ing a close p o i abili y-emissions link. Findings a e obus agains
ou lie s bu a y wi h changing p o i abili y me ics. This esea ch con ibu es o he p o i abili y-sus ainabili y deba e, o e -
ing insigh s o policymake s, schola s, and manage s, while emphasizing he need o conside indus y and Scope-speci ic
dynamics o comba clima e change.
Keywo ds: GHG emissions; p o i abili y; sus ainabili y epo ing
1. In oduc ion
In he las decades, he accele a ing pace o clima e
change has b ough he issue o g eenhouse gas (GHG) emis-
sions o he o e on o global discussions (Manabe, 2019;
Solomon e al., 2009; an Vuu en & Riahi, 2008). The impac
o co po a e ac i i ies on he en i onmen , mainly h ough
GHG emissions, has become a c i ical a ea o conce n. Com-
panies wo ldwide a e s ill making subs an ial p o i s based
on business p ac ices de imen al o he en i onmen (T u-
cos , 2013). The Uni ed Na ions’ (UN) Sus ainable De elop-
men Goals (SDGs) and he Pa is Clima e Ag eemen o 2015
unde sco e he need o a global e o o educe GHG emis-
sions and comba clima e change (Uni ed Na ions, 2015a).
These in e na ional amewo ks ha e se he s age o mo e
s ingen egula ions and epo ing equi emen s, pa icu-
la ly in he Eu opean Union (EU), which is ecognised as a
leade in sus ainabili y epo ing (Ba bu e al., 2022). The
EU has aken signi ican s eps o in eg a e sus ainabili y in o
co po a e epo ing, p ima ily h ough he Non-Financial
Repo ing Di ec i e (NFRD) and i s successo , he Co po-
a e Sus ainabili y Repo ing Di ec i e (CSRD) (Eu opean
Union, 2022). These di ec i es manda e la ge companies o
disclose hei en i onmen al social, and go e nance (ESG)
pe o mance, wi h a speci ic emphasis on GHG emissions
ca ego ised unde Scope 1, Scope 2 and Scope 3 as pe he
GHG P o ocol (WRI & WBCSD, 2004). Scope 1 encompasses
di ec emissions om sou ces owned o con olled by he
company. Scope 2 e e s o indi ec emissions esul ing om
he p oduc ion o elec ici y, s eam, hea ing and cooling ha
he company pu chases. Scope 3 co e s all o he indi ec
emissions associa ed wi h he company’s alue chain. (WRI
& WBCSD, 2004)
Amids he inc easing public and egula o y a en ion
on GHG emissions, bo h schola s and business p o essionals
ha e ques ioned whe he “i pays o be g een” (see, e.g.,
Busch and Ho mann, 2011; Co e, 2021; Hoang e al., 2020;
Lewandowski, 2017). This inqui y sugges s ha companies
achie ing lowe GHG emissions may expe ience enhanced
p o i abili y o inc eased i m alue. This pe spec i e aligns
wi h Po e ’s Hypo hesis, which posi s a “win-win” scena io
DOI: h ps://doi.o g/10.5282/jums/ 10i2pp292-333
© The Au ho (s) 2025. Published by Junio Managemen Science.
This is an Open Access a icle dis ibu ed unde he e ms o he CC-BY-4.0
(A ibu ion 4.0 In e na ional). Open Access unding p o ided by ZBW.
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333 293
whe e s ic e egula ions os e inno a ion, imp o e com-
pe i i e ad an age and ul ima ely enhance inancial pe o -
mance (Po e , 1980; Po e & an de Linde, 1995; Wad-
dock & G a es, 1997). Howe e , exis ing li e a u e p esen s
mixed indings on his ela ionship (Galama & Schol ens,
2021; Iwa a & Okada, 2011; J. Wang e al., 2021). Some
s udies e en sugges ha “i pays no o be g een”, implying
ha highe GHG emissions may be associa ed wi h g ea e
p o i abili y (Rokhmawa i e al., 2015; L. Wang e al., 2014).
These con lic ing esul s highligh he complexi y o his e-
sea ch a ea, wi h some schola s p oposing he exis ence o
e e se causali y o bidi ec ionali y be ween inancial pe -
o mance and GHG emissions, which could signi ican ly in-
luence he obse ed ou comes (End ika e al., 2014; Tes a
& D’Ama o, 2017; Waddock & G a es, 1997). None heless,
limi ed esea ch add esses his po en ial e e se ela ion-
ship, encapsula ed in he ques ion: “Does p o i abili y d i e
sus ainabili y?” (Hassan & Romilly, 2018; Meng e al., 2023;
Shahgholian, 2019). This po en ial ela ionship, g ounded
in he Slack Resou ce Theo y and aspec s o S akeholde
and Legi imacy Theo y, sugges s ha mo e p o i able compa-
nies may na u ally in es mo e in GHG educ ion e o s o
achie e legi imacy and manage s akeholde ela ions (see,
e.g., Cye and Ma ch, 1963; Dowling and P e e , 1975;
F eeman, 1984; Waddock and G a es, 1997). The impac o
p o i abili y on GHG emissions ep esen s a c i ical ye un-
de explo ed a ea o s udy, which could con ibu e o a deepe
unde s anding o he p o i abili y-sus ainabili y nexus.
This hesis add esses his esea ch gap by comp ehen-
si ely analysing Scope 1, 2 and 3 GHG emissions epo ed
by Eu opean companies om 2017 o 2023 and empi ically
examining p o i abili y’s impac on hese emissions. Gi en
Eu ope’s obus epo ing amewo k, high da a quali y and
a ailabili y a e an icipa ed. Consequen ly, he s udy will o-
cus on companies lis ed on he STOXX Eu ope 600 index,
including some o he egion’s la ges i ms. The cen al e-
sea ch ques ions o his hesis a e wo old:
(1) Wha a e he Scope 1, 2 and 3 GHG emissions le els o
Eu opean companies om 2017 o 2023?
(2) How does i m p o i abili y impac o al and indi idual
Scope 1, 2 and 3 GHG emissions?
By answe ing hese ques ions, his hesis aims o con-
ibu e o he cu en li e a u e on co po a e sus ainabili y
epo ing, CO2-Foo p in s, and he ela ion be ween inancial
pe o mance and GHG emissions o p o ide aluable insigh s
o policymake s, co po a e manage s, and o he s akehold-
e s. This wo k will be s uc u ed as ollows: The second
chap e p o ides a de ailed o e iew o he undamen als o
sus ainabili y epo ing, including he egula o y landscape
and he speci ic equi emen s o he GHG P o ocol. The hi d
chap e p esen s a sys ema ic li e a u e e iew (SLR), high-
ligh ing he academic ele ance o he esea ch ques ions and
iden i ying gaps in he exis ing li e a u e. The ou h chap-
e explains he heo e ical amewo k, d awing on Slack Re-
sou ces, Legi imacy and S akeholde Theo y, o explain he
po en ial impac o p o i abili y on GHG emissions. The i h
chap e de elops and discusses he hypo heses o his e-
g ession. The six h chap e ou lines he me hodology used
o collec and analyse da a, ollowed by a p esen a ion o he
esul s in he se en h chap e . The concluding chap e dis-
cusses he implica ions o he indings, hei limi a ions and
p o ides concluding ema ks.
This esea ch is pa icula ly imely as companies p epa e
o comply wi h he new CSRD equi emen s, which will make
he disclosu e o all h ee Scopes o GHG emissions manda-
o y o app oxima ely 50,000 companies s a ing in 2024
(Eu opean Pa liamen , 2022; Eu opean Union, 2022). The
indings o his hesis will no only shed ligh on he cu en
s a e o GHG emissions epo ing in Eu ope bu also guide
u u e esea ch and policies. Fu he mo e, by explo ing he
ela ionship be ween p o i abili y and GHG emissions, his
s udy aims o in o m he ongoing deba e on whe he and
how economic pe o mance is aligned wi h en i onmen al
sus ainabili y. Be o e p oceeding wi h he li e a u e e iew
and he analysis o GHG emissions, i is essen ial o unde -
s and he basics o sus ainabili y epo ing, speci ically he
GHG P o ocol, which will be discussed in he ollowing chap-
e s.
2. Fundamen als o Sus ainabili y Repo ing
B oad publica ions o GHG emissions by companies oc-
cu ed ela i ely ecen ly and has been la gely in luenced by
ecen ad ancemen s in non- inancial epo ing p ac ices. A
basic unde s anding o he non- inancial o sus ainabili y e-
po ing landscape is necessa y o analyse he coun e ailing
ends in GHG emissions and unde s and he ac o s in lu-
encing hem. The e o e, his hesis i s b ie ly in oduces
sus ainabili y epo ing and he sus ainabili y epo ing land-
scape.
2.1. In oduc ion o Sus ainabili y Repo ing
The in oduc ion o sus ainabili y epo ing begins wi h
a basic de ini ion o he e m and hen b ie ly discusses i s
impo ance, bene i s, and challenges.
2.1.1. De ini ion
A i s , he meaning o sus ainabili y epo ing migh
seem easy o g asp; i ocuses p ima ily on En i onmen al,
Social, and Go e nance (ESG) opics and is also desc ibed
as non- inancial in o ma ion (NFI). Howe e , acco ding o
E kens e al. (2015), who analysed 787 a icles published
in 53 jou nals om 1973 o 2013, non- inancial in o ma ion
seems o need a mo e p ecise de ini ion. They a ibu e his
o he ambigui y o he concep o NFI and y o de ine he
opic on hei own.
Be o e we mo e on o he de ini ion o NFI, i is help ul
o i s de ine inancial epo ing o dis inguish be ween he
wo opics and highligh he di e ences. T adi ional inan-
cial epo ing has become highly s anda dised and is based
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333294
on gene ally accep ed accoun ing p inciples (Ampo o & Sel-
lani, 2005). In Eu ope, o example, hese a e published by
in e na ional associa ions such as he In e na ional Accoun -
ing S anda ds Boa d (IASB) and o m he basis o oday’s i-
nancial epo ing (Van G euning e al., 2011). This ype o e-
po ing aims o in o m in es o s abou a company’s inancial
pe o mance. The IFRS F amewo k s a es ha he objec i e
is o “p o ide inancial in o ma ion abou he epo ing en i y
ha is use ul o exis ing and po en ial in es o s, lende s and
o he c edi o s in making decisions abou p o iding esou ces o
he en i y” (IFRS Founda ion, 2018, Concep ual F amewo k,
§1.2). Pe de ini ion, he disclosu e o inancial in o ma ion
p o ides he co ec in o ma ion o in es o s, lende s, and
o he c edi o s, bu in he las decades, calls om in es o s
and o he s akeholde s o non- inancial epo ing on c ucial
ESG issues ha e inc eased (KPMG, 2022).
Acco ding o E kens e al. (2015, p. 25), NFI can be
de ined as a disclosu e “on dimensions o pe o mance o he
han he adi ional assessmen o inancial pe o mance”, in-
cluding, bu no limi ed o, opics ela ed o ESG. Ta quinio
and Posadas (2020) conduc ed a li e a u e e iew on he
e m “non- inancial in o ma ion” and ound ha he e is s ill
no consensus on he exac de ini ion o his e m. In ad-
di ion o he NFI, he e m “sus ainabili y epo ing” is em-
ployed almos synonymously, and inc eased use o i can be
obse ed (Baumülle & G benic, 2021; Eccles e al., 2020).
The change om he Non-Financial Repo ing Di ec i e o
he Co po a e Sus ainabili y Repo ing Di ec i e is an exam-
ple o he shi o he e m “sus ainabili y epo ing”, which,
as he name sugges s, consciously emphasises he impo ance
o a mo e in eg a ed way o hinking abou global issues and
a ool o igh clima e change (Baumülle & Sopp, 2022). The
e m “sus ainabili y epo ing” has now es ablished i sel and,
o some ex en , eplaces and expands he e m “non- inancial
in o ma ion” (Baumülle & G benic, 2021). Fo his hesis,
hese de ini ions a e su icien since we limi ou sel es o he
in o ma ion on GHG emissions included in he sus ainabili y
o annual epo s and do no engage wi h he documen s in
hei en i e y. Ha ing es ablished an unde s anding o he
de ini ion o sus ainabili y epo ing, he nex s ep is o del e
in o i s ele ance and impo ance o he business landscape.
2.1.2. Impo ance and Rele ance
The opic o sus ainabili y epo ing has become om-
nip esen o companies, and an inc ease in esea ch con-
ce ning sus ainabili y epo ing can be obse ed (E kens e
al., 2015). New egula ions p ima ily d i e he end, as
a ound 11,700 public-in e es en i ies ha e been obliged o
epo by he EU NFRD s a ing in 2017, and abou 50,000
will be, unde he new CSRD (Eu opean B oadcas ing Union,
2023). This epo ing egula ion is needed because pas e -
o s o igh clima e change ha e no been enough, and
go e nmen s ha e commi ed hemsel es, albei no legally
binding, o achie ing he SDGs (Uni ed Na ions, 2015b).
Con e sely, his means hey mus encou age he achie emen
o he clima e goals and moni o p og ess h ough na ional
o in e na ional egula ion. The epo ing o non- inancial
in o ma ion has made signi ican p og ess o e he las yea s
and comes wi h g ea bene i s o a ious s akeholde s (Bual-
lay, 2019; James, 2015), bu s ill has signi ican challenges
o o e come, pa icula ly conce ning i s alignmen wi h he
a ainmen o he UN SDGs (Tsalis e al., 2020). Bo h ben-
e i s and challenges will be discussed in he ollowing wo
chap e s.
2.1.3. Bene i s and Ad an ages
Va ious esea ch on he bene i s o sus ainabili y epo -
ing was published, and he posi i e e ec s can be obse ed
o companies and he common good (Bellan uono e al.,
2016; Ioannou & Se a eim, 2017; Toma , 2022). Resea ch
conduc ed by Toma (2022) analysed he e ec s o he U.S.
GHG Repo ing P og am on he GHG amoun s emi ed by
acili ies and ound ha he disclosu e alone led o a 7,9%
educ ion o hei espec i e GHG emissions. Benchma k-
ing and epo ing GHG emissions alone seem o encou age
educ ion and is, he e o e, a welcome posi i e e ec o
sus ainabili y epo ing (Toma , 2022). Ano he bene i is
he inc eased anspa ency and disclosu es i ms make on
sus ainabili y issues (Ioannou & Se a eim, 2017). The s ake-
holde s a e, on he one hand, pushing i ms o inc ease
disclosu es and, on he o he hand, bene i om i because
manda o y bu also olun a y epo ing on en i onmen al,
social, and go e nance ma e s p o ides he s akeholde s
wi h insigh s in o companies ha would no be common be-
o e his end (Bellan uono e al., 2016; Fe nandez-Feijoo
e al., 2014; He emans e al., 2016; Mane i & Tocca ondi,
2012). In 2015, he Chie Execu i e O ice o he Global
Repo ing Ini ia i e (GRI), a global s anda d-se e o sus-
ainabili y epo ing, p oposed ano he iew o sus ainabili y
epo ing du ing an in e iew (Ki on & K uschwi z, 2015).
Acco ding o him, he epo s can highligh ma e ial and
ele an sus ainabili y issues o he companies (Ki on & K -
uschwi z, 2015) and, he e o e, be used as a s a egic ool o
decision-making and isk managemen , which was al eady
esea ched by C. A. Adams and F os (2008). Fu he mo e,
sus ainabili y epo ing and, he e o e, he combina ion o
highe anspa ency, be e isk assessmen and decision-
making seems o ha e a posi i e impac on i m alua ions
(Kuzey & Uya , 2017; Loh e al., 2017).
Ne e heless, mos esea ch obse ing he bene i s o sus-
ainabili y epo ing was conduc ed be o e i became manda-
o y o mos majo Eu opean companies. The cu en egu-
la o y de elopmen s, namely he NFRD and upcoming CSRD,
could lead o a si ua ion whe e i is no longe epo ing pe
se, which b ings ad an ages o he companies bu a he el-
a i e pe o mance owa ds sus ainabili y goals. A e ha ing
e iewed he po en ial bene i s, we will look a he cu en
challenges sus ainabili y epo ing aces.
2.1.4. Challenges and Obs acles
Al hough he beginnings o sus ainabili y epo ing go
back se e al decades, many challenges can s ill be obse ed.
Despi e a signi ican numbe o companies using he GRI
s anda ds o hei epo ing, a conside able challenge is he
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333 295
lack o compa abili y be ween hei cu en epo s and pas
ones, as well as wi h he epo s o o he companies and in-
dus ies (Zsóka & Vajkai, 2018). Ano he s udy by Ca doni
e al. (2019) analysed he compa abili y o 41 GRI epo s o
lis ed oil and gas companies and no ed he low compa abil-
i y be ween he epo s. Poo compa abili y is s ill a p ob-
lem ha will hope ully imp o e wi h mo e egula ion and
equi emen s on c ucial aspec s like he key pe o mance in-
dica o s and he o ma o sus ainabili y epo s.
Repo ing s anda ds such as GRI seem o ha e inc eased
he quali y o sus ainabili y epo s, as Diou and Boi al
(2017) analysed h ough s akeholde in e iews. Howe e ,
he quali y o he sus ainabili y epo s s ill lacks behind i-
nancial epo ing and is highly in luenced by he speci ic ap-
plica ion and in e p e a ion, e.g., he GRI p inciples (Boi al
e al., 2019; Diou & Boi al, 2017). Nex o quali y issues,
he ma e iali y is challenging o assess due o he subjec i e
na u e o speci ic in o ma ion (Wu e al., 2018). A solu ion
would be assu ance s a emen s, as we see hem o inancial
s a emen s and annual epo s (Wallage, 2000). Howe e ,
a s udy by O’Dwye and Owen (2005) and a newe one
by Boi al and He as-Saiza bi o ia (2020) ques ion he use-
ulness o his p ac ice and show he lack o eliabili y o
assu ance s a emen s. A signi ican issue Boi al and He as-
Saiza bi o ia (2020) c i icises in he assu ance p ocedu es
is he seeming disconnec ion “ om eal sus ainabili y issues
and epo ing equi emen s” (Boi al & He as-Saiza bi o ia,
2020, p. 12). Time will ell how and whe he manda o y
audi s on sus ainabili y epo ing will p e ail. As o now, he
new EU CSRD will equi e limi ed assu ance o sus ainabil-
i y in o ma ion (Eu opean Union, 2022). The low quali y,
low compa abili y and lack o anspa ency o sus ainabil-
i y epo s con adic hei ac ual goal, namely, p o iding
anspa en in o ma ion on he sus ainabili y pe o mance
o companies. In a s udy o 21 GRI epo s a ed A and A+,
Boi al (2013) ound ha 90% o he ele an sus ainabili y
e en s we e no co ec ly p esen ed in he epo s. Fu he -
mo e, g eenwashing is s ill a p oblem, making i di icul o
sus ainabili y epo s o build c edibili y in he igh agains
clima e change (de F ei as Ne o e al., 2020). This unde -
mines he anspa ency and c edibili y o he epo s (Boi al,
2013; de F ei as Ne o e al., 2020) and aises he ques ion
o whe he hey a e conduci e o achie ing clima e goals.
In summa y, despi e s anda ds such as he GRI and e -
o s by companies, sus ainabili y epo s emain di icul o
compa e and can lack anspa ency. Regula o s and indepen-
den ini ia i es ha e been ying o es ablish s anda ds o
se e al yea s and ha e al eady g ea ly imp o ed epo ing,
bu a mul i ude o di e se s anda ds and amewo ks ha e
eme ged, leading o complexi y and challenges in comp e-
hension and implemen a ion.
2.2. The Sus ainabili y Repo ing Landscape
Building on he in oduc ion o sus ainabili y epo ing,
he ollowing chap e will explo e he landscape o egula-
ions, s anda ds, and amewo ks a ound sus ainabili y e-
po ing, wi h a ocus on he global goals and p inciples and
he egula ions in Eu ope.
2.2.1. In oduc ion o Sus ainabili y Regula ions and F ame-
wo ks
Sus ainabili y epo s ha e been an in eg al pa o co -
po a e epo ing o se e al yea s. In con as o inancial
epo ing, he egula o y en i onmen was and s ill is much
mo e agmen ed (Young, 2023). This sec ion analyses he
landscape a ound sus ainabili y epo s, and he la es de-
elopmen s in he ield a e discussed. Inspi ed by he pub-
lica ion o Helbing (2022) on he epo ing landscape, his
wo k op ed o a py amid-shaped s uc u e, displayed in Fig-
u e 1, which ep esen s he a ious sub-a eas o sus ainabil-
i y epo ing e ec i ely. The SDGs o he UN and he Pa is
Clima e Ag eemen a e he o e a ching goals o sus ainabil-
i y epo ing, and he go e nmen al egula ions o achie e
hem will be examined in he ollowing. The ocus is on he
Eu opean s anda ds NFRD and CSRD, which ha e al eady
been published and co e he companies in ou s udy. No
o be o go en a e he China ESG Disclosu e S anda ds, he
upcoming SEC Clima e Disclosu es om he USA, and o he
coun y-speci ic egula ions, which we will no examine u -
he in he con ex o his wo k. The co ne s ones o sus-
ainabili y epo s a e he a ious amewo ks and s anda ds
ha ha e been es ablished in ecen yea s. These include he
newly ounded In e na ional Sus ainabili y S anda ds Boa d
(ISSB), which aims o consolida e mul iple s anda ds and
amewo ks unde he IFRS Founda ion o es ablish i sel as
a global s anda d (IFRS Founda ion, 2024). In addi ion, he
GRI, he GHG P o ocol, he Task Fo ce on Clima e- ela ed Fi-
nancial Disclosu es (TCFD), he Science Based Ta ge s Ini ia-
i e (SBTi), and he Ca bon Disclosu e P ojec (CDP), ha e
also es ablished hemsel es in he sus ainabili y epo ing
landscape.
The wo sub-a eas, Global Goals & P inciples and Go -
e nmen al Regula ions, will be co e ed in mo e de ail be-
low. The GHG P o ocol and he h ee di e en Scopes a e
discussed in a sepa a e chap e due o hei impo ance o
ou analysis o co po a e GHG emissions.
2.2.2. Global Goals and P inciples
The 17 SDGs adop ed by he UN in Sep embe 2015 ma k
a miles one o global goals and ha e also in luenced sus ain-
abili y epo s (Uni ed Na ions, 2015b). Fo he i s ime
in his o y, he UN shi ed o “one sus ainable de elopmen
agenda”, se ing he goals on a global scale (Bie mann e al.,
2017, p. 26). The new app oach adop ed by he UN is “go -
e nance by goals”, which is no legally binding (Kim, 2016)
bu based on sha ed objec i es om he UN Membe s a es
(Bie mann e al., 2017). An addi ional unique cha ac e is-
ic o he SDGs is he ocus on all ele an ac o s, including
companies and social o ganisa ions, a he han only ocus-
ing on he s a es (Uni ed Na ions, 2015b). The 17 SDGs com-
bine 169 de ined a ge s wi h speci ic deadlines, bu some
emain quali a i e, lea ing oom o in e p e a ion (Uni ed

Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333296
Figu e 1: Sus ainabili y Repo ing Landscape Py amid, based on Helbing (2022)
Na ions, 2015b). In ecen yea s, s anda ds se e s, ins i u-
ions, and companies ha e sough o include SDGs in hei
co po a e epo ing, an essen ial s ep owa ds achie ing he
goals (Elal y e al., 2021; Sub amaniam e al., 2023). Fo
example, GRI links he GRI s anda ds o SDGs, hus allow-
ing companies o i mly es ablish he SDGs in hei epo ing
(GRI, 2022). Howe e , he quali a i e na u e o some SDGs,
oge he wi h he challenges o sus ainabili y epo ing dis-
cussed in Chap e 2.1.4, lead o sho comings such as in an-
gibili y, low s anda disa ion, omission o nega i e impac s,
and lack o compa abili y (Diaz-Sa achaga, 2021). Despi e
hei olun a y cha ac e and some sho comings in he dis-
closu es, he SDGs ha e ound hei way in o sus ainabili y
epo s. They can be seen as he global goals and p inciples
ha businesses, go e nmen s and o he pa s o socie y aim
o achie e.
Ano he global goal alongside he SDGs is he limi a ion
o he global a e age empe a u e inc ease o well below
2◦C, as ag eed on by he UN in he Pa is Ag eemen , he
i s in ime legally binding global clima e change ag eemen
(Uni ed Na ions, 2015a). This ag eemen explici ly limi s he
ise in empe a u e and he global emission le els, which is
linked o he GHG emissions in sus ainabili y epo s. The
main mi iga ion objec i es a e o limi he global a e age
empe a u e inc ease o well below 2◦C abo e p e-indus ial
le el and s i e o he mo e ambi ious 1,5◦C a ge . These
a ge s equi e global emissions o peak as soon as possible
and subsequen ly educed quickly. In addi ion, i was ag eed
in he Pa is Ag eemen o ack he p og ess o he commi -
men s and o ely on a anspa en sys em o his pu pose.
(Uni ed Na ions, 2015a) Subsequen ly, he limi a ion o GHG
emissions and anspa en measu emen o a ge s equi es
coun ies and companies o clea ly disclose and educe GHG
emissions.
The wo UN con en ions equi e, al hough only he Pa is
Ag eemen is legally binding, go e nmen s o inco po a e he
goals in o hei legisla ion (Uni ed Na ions, 2015a,2015b).
To mee hese equi emen s, coun ies and coun y unions
such as he EU ha e published laws and equi emen s o sus-
ainabili y epo ing, which we will discuss in he ollowing
chap e .
2.2.3. NFRD and CSRD in Eu ope
Regula ions shape oday’s inancial epo ing and ha e
con ibu ed signi ican ly o he s anda disa ion and compa-
abili y o inancial epo s (Van G euning e al., 2011). Sim-
ila ly, new egula ions on non- inancial epo ing ha e de-
eloped in ecen yea s and al eady cha ac e ise a signi ican
p opo ion o sus ainabili y epo s. Based on global p inci-
ples, his ex will now ocus on he Eu opean scope only.
In he Eu opean Union, he i s ele an egula ion on
non- inancial epo ing was published on 5 Decembe 2014,
unde he name NFRD (Eu opean Union, 2014). Di ec-
i e 2014/95/EU on disclosu e o non- inancial and di e -
si y in o ma ion equi es la ge public-in e es en i ies wi h
mo e han 500 employees, which amoun s o app oxima ely
11’700 companies in he Eu opean Union, o disclose ele-
an non- inancial in o ma ion o in es o s and o he s ake-
holde (Eu opean B oadcas ing Union, 2023). To quo e he
o icial summa y o he law:
“Such companies a e equi ed o gi e a e iew o
hei business model, policies, ou comes, p inci-
pal isks and key pe o mance indica o s, including
on: en i onmen al ma e s; social and employee
aspec s; espec o human igh s; an i-co up ion
and b ibe y issues.” (Eu opean Union, 2019, p.
1)
The NFRD equi ed companies o comply wi h he di ec-
i e o he i s ime in he 2017 inancial yea epo s pub-
lished in 2018, aising he sus ainabili y epo ing equi e-
men s in Eu ope. Al hough he disclosu e o GHG emissions
by Scopes only becomes manda o y wi h he CSRD, a la ge
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333 297
sha e o Eu opean companies al eady epo ing hei Scope
1, 2 and 3 GHG emissions is expec ed. The e o e, he GHG
emission numbe s o FY 2017 ma k he ideal s a ing pe iod
o ou analysis pe iod om 2017 o 2023. Ne e heless, he
NFRD ga e he epo ing companies subs an ial eedom in
he choice o how o epo and did no equi e a speci ic
s anda d o amewo k, which led o di icul ies in compa a-
bili y, ele ance, and eliabili y o he di e en non- inancial
disclosu es (Hahnkampe -Vandenbulcke, 2021).
As pa o he Eu opean G een Deal, i was decided on 11
Decembe 2019 o e iew he NFRD and sol e he associa ed
p oblems and sho comings (Hahnkampe -Vandenbulcke,
2021). The main issues and needs iden i ied du ing he
public consul a ion we e he lack o compa abili y, eliabili y
and ele ance, o e laps wi h o he egula ions, he lack o a
manda o y epo ing s anda d, s ic e audi equi emen s, a
digi alisa ion o non- inancial epo ing, he disclosu e o he
ma e iali y assessmen p ocedu es used by companies and
las bu no leas he ex ension o manda o y non- inancial
epo ing o o he lis ed and inco po a ed companies ac i e
in he EU (Hahnkampe -Vandenbulcke, 2021). The EU’s
solu ion o hese p oblems was o come in o o ce on Jan-
ua y, 5, 2023 unde he CSRD (Eu opean Union, 2022). The
CSRD applies o companies wi h wo ou o he h ee ol-
lowing cha ac e is ics: >500 employees and/o , >€40mio
u no e and/o , >€20mio o al asse s and o all lis ed
companies (Eu opean Union, 2022), which enla ges he
numbe o companies equi ed o epo unde CSRD o ap-
p oxima ely 50,000 (Eu opean Pa liamen , 2022; Eu opean
Union, 2022). In addi ion o he supplemen a y compa-
nies co e ed by he new di ec i e, he epo ing equi e-
men s o he NFRD emain in e ec , nex o he addi ional
equi emen s in oduced by he CSRD (Eu opean Union,
2022). Companies mus epo in acco dance wi h he CSRD
om he 2024 inancial yea onwa ds, ollowing he new
Eu opean Sus ainabili y Repo ing S anda ds (ESRS) de el-
oped by he Eu opean Financial Repo ing Ad iso y G oup
(EFRAG). Since compliance wi h new s anda ds in ol es sig-
ni ican di ec and indi ec cos s, and o ganisa ional e o ,
as EFRAG’s cos analysis poin s ou (EFRAG, 2023a), he e
will be simpli ied epo ing o small and medium-sized en-
e p ises. Wi h he ESRS, he Eu opean Union is esponding
o he demand o S akeholde s o a uni o m s anda d o
sus ainabili y epo s, which should lead o g ea e compa-
abili y (Eu opean Commission, 2023).
An essen ial p inciple in oduced wi h he CSRD is he
double ma e iali y, which s a es ha companies mus i s
documen he impac o sus ainabili y issues on hei com-
pany’s inancial and co po a e si ua ion and, secondly, he
impac he company has on sus ainabili y issues. In con-
as o he egula ions o he NFRD, his equi es compa-
nies o epo on opics ha impac he en i onmen bu no
hei economic si ua ion, hus p e en ing one-sided epo -
ing (en o ia, 2022). Fu he mo e, he CSRD equi es compa-
nies o epo addi ional in o ma ion on in angibles, includ-
ing o wa d-looking a ge s, and link hem o he ele an
a ge s o he Pa is Ag eemen and UN SDGs.
Ano he objec i e o he new di ec i e is a s anda d-
ised epo ing design. Mos o he ele an in o ma ion
om CSRD-complian epo ing will ha e o be digi ised and
machine- eadable in he Eu opean Single Elec onic Fo ma
(ESEF/XHTML), which should acili a e compa abili y and
in o ma ion sea ch wi hin he sus ainabili y epo s (ESMA,
n.d.). Finally, he new CSRD in oduces a manda o y limi ed
ex e nal assu ance o he published sus ainabili y in o ma-
ion (Eu opean Commission, n.d.).
I is s ill oo ea ly o obse e he e ec s o he CSRD on
sus ainabili y epo ing, bu he NFRD has al eady led o
in e es ing de elopmen s. A s udy by Cuomo e al. (2022)
analysed he e ec s o he NFRD on co po a e social espon-
sibili y and ound an inc ease in pe o mance and ans-
pa ency. Ano he s udy linked he NFRD o be e en i-
onmen al and social pe o mance on ESG sco es bu could
no ind a signi ican e ec on he go e nance dimension
(Aluchna e al., 2023).
In summa y, signi ican de elopmen s in he egula o y
en i onmen o he Eu opean Union a e obse ed. The new
CSRD add esses many o he p oblems o he NFRD, which
will hope ully lead o he desi ed e ec s, such as inc eased
anspa ency, compa abili y, GHG educ ion and use ulness
o sus ainabili y epo ing. A single s anda d s anding ou
when i comes o he de ini ion and calcula ion o GHG emis-
sions is he GHG P o ocol. The e o e, ge ing an o e iew
o his s anda d and unde s anding he indi idual Scope 1, 2
and 3 GHG emission Scopes is wo hwhile. Acco dingly, he
GHG P o ocol will be discussed in he nex chap e .
2.3. The GHG P o ocol: Scope 1, 2 and 3 GHG Emissions
The GHG emissions o Eu opean companies a e a key o-
cus o his s udy, and he GHG P o ocol has es ablished i sel
as a s anda d o hei de ini ion and calcula ions. The e o e,
his chap e will p o ide a b ie in oduc ion o he GHG P o-
ocol and he indi idual Scope 1, 2 and 3 emissions.
2.3.1. In oduc ion and Rele ance o he GHG P o ocol
The GHG P o ocol Ini ia i e was launched in 1998 by
a pa ne ship o NGOs, go e nmen s, businesses and ins i-
u ions. The i s edi ion o he GHG P o ocol Co po a e
S anda ds was published in 2001, wi h a e ised edi ion in
2004, and was well ecei ed by he s akeholde s (G een,
2010). The p o ocol p o ides a s anda d and ecommenda-
ions o companies, as well as o he o ganisa ions, o quan-
i y hei GHG emissions, and includes accoun ing and e-
po ing guidelines o he se en GHG de ined by he Kyo o
P o ocol: ca bon dioxide (CO2), me hane (CH4), ni ous
oxide (N2O), hyd o luo oca bons (HFCs), pe luo oca bons
(PFCs), sulphu hexa luo ide (SF6), and Ni ogen i luo ide
(NF3). (WRI & WBCSD, 2004) A e i s in oduc ion, he
GHG P o ocol has gained accep ance as a s anda d in ecen
yea s and is explici ly ecommended o equi ed by he GRI,
CDP, SBTi, and ESRS, among o he s, o calcula e GHG emis-
sions (CDP, 2023; EFRAG, 2023b; G een, 2010; GRI, 2024;
SBTi, 2024).
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333298
An in oduc ion o he GHG p o ocol is essen ial o his
wo k, as he GHG P o ocol has become he s anda d in e-
po ing and acco dingly, mos o he calcula ion o GHG emis-
sions by companies a e calcula ed wi h he GHG P o ocol
Co po a e S anda d (G een, 2010). The GHG P o ocol p o-
ides a comp ehensi e amewo k consis ing o i e s eps o
iden i y and quan i y GHG emissions. These emissions a e
ca ego ised in o h ee dis inc Scopes—Scope 1, Scope 2,
and Scope 3—each o which has unique implica ions and
me hodologies o calcula ion. Consequen ly, a sho insigh
in o he h ee di e en Scopes, explained by he example o
Thyssenk upp AG, will be gi en. The i s s ep is o iden i y
he sou ces o GHG emissions, which ypically occu om s a-
iona y combus ion, mobile combus ion, p ocess emissions,
and ugi i e emissions. A e he iden i ica ion comes he
selec ion o a calcula ion app oach; he mos accu a e way
would be o measu e he emissions di ec ly a he poin o
o igin, which can ha dly be gua an eed in eali y and would
o en cause oo high cos s. The e o e, emission ac o s o
speci ic p ocesses o uel quan i ies a e o en used, allowing
a cos -e ec i e and ela i ely accu a e measu emen . How-
e e , companies a e always encou aged o use he mos ac-
cu a e and app op ia e me hod. Nex comes he collec ion o
da a ac oss he h ee Scopes and he applica ion o calcula-
ion ools, like he GHG P o ocol Ini ia i e publishes on hei
websi e. The calcula ion ools can be di ided in o wo ca -
ego ies: he c oss-sec o ools o GHG emissions ha apply
o mul iple sec o s equally, like s a iona y combus ion and
mobile combus ion, and he sec o -speci ic ools o speci ic
sec o s like cemen , s eel, aluminium, o o ices. Finally, he
collec ed in o ma ion mus be agg ega ed a he co po a e
le el. This can be done wi h he cen alised and decen alised
app oaches; a cen alised app oach eques s ac i i y o uel
use da a om he epo ing uni s, and he emissions a e cal-
cula ed by he cen al based on his in o ma ion; a decen-
alised app oach equi es epo ing uni s o calcula e GHG
emission hemsel es, which leads o addi ional wo k o he
s a egic business uni s bu c ea es mo e unde s anding o
he emissions. (WRI & WBCSD, 2004, p. 41–46) Nex ol-
lows a sho desc ip ion o Scope 1 o 3 and examples o he
espec i e emissions.
2.3.2. The Th ee Emission Scopes
Scope 1 GHG emissions e e o di ec emissions o GHG
om sou ces owned o con olled by an o ganisa ion. These
emissions esul om ac i i ies o p ocesses ha occu wi hin
an o ganisa ion’s ope a ional bounda ies. Common sou ces
o Scope 1 emissions include on-si e combus ion o ossil
uels, such as hose used in hea ing, indus ial p ocesses,
and anspo a ion, as well as emissions om chemical e-
ac ions o o he on-si e ac i i ies. (WRI & WBCSD, 2004)
Acco ding o he de ini ion, Scope 1 emissions will be high
o companies bu ning ossil uels du ing hei p oduc ion.
ThyssenK upp AG (TK) seems o be a good example as hey
eco ded compa ably high emissions o Scope 1 and p o-
ided u he in o ma ion on hei me hodology in hei CDP
Response Repo – Clima e Change 2023 (Thyssenk upp,
2024). The company eco ds all i s emissions acco ding o
he Co po a e GHG P o ocol and chose Oc obe 1, 2017, o
Sep embe 30, 2018, as a base yea o all h ee emission
Scopes. Scope 1 emissions o he base yea we e 24.2 Mio.
. o CO2equi alen s (CO2e) and 21.4 Mio. . o CO2e o
he yea 2023, which is ela i ely high due o hei di ec
emissions om coal and coke usage in hei s eel business
(Thyssenk upp, 2024). Acco ding o TK, he s eel di ision
is esponsible o 95% o hei GHG emissions, and blas
u naces and elec ic a c u naces cause he mos signi ican
olume.
Scope 2 GHG emissions encompass indi ec emissions as-
socia ed wi h consuming pu chased o ou sou ced ene gy,
such as elec ici y, s eam, o hea . These emissions occu ou -
side an o ganisa ion’s ope a ional bounda ies bu esul om
he gene a ion o ene gy he o ganisa ion uses. Common
sou ces o Scope 2 emissions include elec ici y pu chased
om he g id, dis ic hea ing o cooling sys ems. (WRI &
WBCSD, 2004) TK’s Scope 2 GHG emissions a e calcula ed
using a loca ion- and ma ke -based app oach. The loca ion-
based app oach de ines a speci ic CO2e pe kWh numbe o
e e yone using he same powe g id. The ma ke -based ap-
p oach allows he company o calcula e i s emissions based
on speci ic ene gy pu chase ag eemen s, wi h an ene gy mix
a ying om he g id a e age (b igh es , n.d.). The loca ion-
based Scope 2 emissions o TK o 2023 a e 0.8 Mio. . o
CO2e and 1.1 Mio. . o CO2e o he ma ke -based app oach,
indica ing ha TK sou ces ene gy om speci ic supply con-
ac s wi h highe han g id a e age CO2e emissions pe kWh
(Thyssenk upp, 2024).
Scope 3 GHG emissions encompass all o he indi ec
emissions ha occu due o an o ganisa ion’s ac i i ies bu
a e beyond i s di ec con ol and ope a ional bounda ies.
Typical sou ces o Scope 3 emissions in ol e emissions asso-
cia ed wi h he en i e supply chain o a p oduc o se ice,
including he li e cycle, pu chased goods and se ices, ans-
po a ion and dis ibu ion, employee commu ing, and he
disposal o end-o -li e ea men o p oduc s and se ices.
These emissions can be much la ge han a company’s Scope
1 and 2 emissions and o en accoun o he mos signi ican
po ion o an o ganisa ion’s o al ca bon oo p in . (WRI &
WBCSD, 2004) Con inuing wi h he TK example, i becomes
clea ha measu ing Scope 3 emissions is a majo challenge
o companies. The Scope 3 calcula ion om TK is based
on he Co po a e Value Chain Accoun ing and Repo ing
S anda d o he GHG P o ocol and is dis ibu ed ac oss 17
emission ca ego ies (WBCSD, 2011). The mos impo an
in he case o TK appea s o be Pu chased goods and se ices
wi h 27.2 Mio. . o CO2e, Fuel-and-ene gy- ela ed ac i i ies
(no included in Scope 1 o 2) wi h 4 Mio. . o CO2e and
Ups eam anspo a ion and dis ibu ion wi h 5.3 Mio. . o
CO2e. O he ca ego ies ha a e o mino ele ance o TK
and cause no o only mino emissions a e he use o sold
p oduc s, employee commu ing, business a el, capi al goods,
in es men s, o anchises (Thyssenk upp, 2024). In o al,
he Scope 3 GHG emissions o TK a e assumed o be abou
37 Mio. . o CO2e, making Scope 3 emissions he mos
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333 299
signi ican pa o o al emissions (Thyssenk upp, 2024). As
shown in he TK example, Scope 3 emissions a e challenging
o assess as hey come om many sou ces ha a company
canno always di ec ly in luence. The accu acy and com-
ple eness ha e been c i icised in cu en li e a u e (Downie
& S ubbs, 2013; Ducoulombie , 2021), and acco ding o he
esea ch o He wich and Wood (2018), he Scope 3 emis-
sions pe cen age o o al emissions is highly a ia ing ac oss
indus ies.
A e his b ie in oduc ion o sus ainabili y epo ing,
he epo ing landscape and, in pa icula , he GHG P o o-
col, he co e ques ion o his hesis will be add essed. In he
o hcoming chap e , a sys ema ic li e a u e e iew will be
conduc ed o p o ide an o e iew o he exis ing esea ch,
hus es ablishing he ele ance and alidi y o he esea ch
ques ions.
3. Sys ema ic Li e a u e Re iew and Academic Rele ance
I is essen ial o con ex ualise he opic wi hin cu en and
pas esea ch o assess he ele ance o his hesis. This is
achie ed wi h a sys ema ic li e a u e e iew examining he
impac o inancial pe o mance on GHG emissions. The i s
sec ion o e s an o e iew o he sys ema ic li e a u e e iew
me hodology u ilised, while he second sec ion discusses he
SLR indings and academic ele ance o his hesis.
3.1. Sys emic Li e a u e Re iew
This chap e begins wi h a b ie in oduc ion o SLRs, ol-
lowed by an explana ion o he i e-s ep me hodological ap-
p oach used o pe o m his SLR by Khan e al. (2003)
3.1.1. SLR Me hodology
A sys emic li e a u e e iew is a “clea ly o mula ed ques-
ion, iden i ies ele an s udies, app aises hei quali y and
summa ises he e idence using explici me hodology” (Khan
e al., 2003, p. 118). The SLR’s ad an ages a e he ans-
pa ency and ep oducibili y o esea ch indings (Snyde ,
2019), and i can help o sys ema ically iden i y cu en
s udies, esea ch app oaches, ends and indings abou he
opic o his wo k: he impac o p o i abili y on GHG emis-
sion le els. A i e-s ep app oach by Khan e al. (2003) is
used o conduc he SLR, as i p o ides a clea s uc u e o
his esea ch.
S ep 1: F aming Ques ions o a Re iew
The esea ch ques ions emain he same as p esen ed in
he in oduc ion and a e di ided in o wo pa s:
(1) Wha a e he Scope 1, 2 and 3 GHG emissions le els o
Eu opean companies om 2017-2023?
(2) How does i m p o i abili y impac o al and indi idual
Scope 1, 2 and 3 GHG emissions?
The goal o he SLR is o sys ema ically iden i y cu en
esea ch on hese o simila opics, ind esea ch gaps, and
assess he academic ele ance o he esea ch ques ions.
S ep 2: Iden i ying Rele an Wo k
Rele an wo k is iden i ied wi h a p ope esea ch s a -
egy, including ca e ully selec ing da abases, de ining key
sea ch e ms, and sys ema ically documen ing he en i e e-
sea ch p ocess. Web o Science and Scopus we e selec ed
o he da abases due o hei wide ange o academic a i-
cles and size. The sea ch e ms de i ed om he esea ch
ques ions abo e we e o ganised in o di e en blocks, sum-
ma ising ela ed e ms in English o achie e op imal accu-
acy. Only English keywo ds we e u ilised in he sea ch
p ocess, as p io analysis indica ed ha he mos pe inen
li e a u e is p edominan ly a ailable in his language. Al-
bei his hesis ocuses on he Eu opean scope, he SLR will
look o wo ldwide s udies, o unde s and he global s a e
o esea ch. Table 1p o ides an o e iew o he sea ch
e minology ac oss he h ee iden i ied blocks, e ec i ely
ep esen ing he esea ch ques ions.
Consequen ly, each da abase o in e es , Web o Science
and Scopus, is subjec o a que y sea ch, and all ma ching
esul s expo ed o Endno e o a i le and abs ac sc eening
in he nex s ep. The exac sea ch que y can be ound in
Appendix 1.
S ep 3: Assessing he Quali y o S udies
This s ep in ol es c i ically e alua ing he quali y and el-
e ance o he s udies iden i ied in he p e ious esea ch s ep,
using p ede e mined c i e ia o including o excluding s ud-
ies. The inclusion c i e ia a e ou lined as ollows:
A ailabili y and Access: The pape s mus be accessi-
ble and a ailable h ough he Uni e si y o S . Gallen
lib a ies.
Language: Pape s mus be w i en in English.
Da e o Publica ion: The s udies should be published
be ween 1997 and 2024, aligning wi h he Kyo o P o o-
col’s esolu ion, which ma ked a signi ican miles one
in he global e o o comba GHG emissions (Uni ed
Na ions, 1998).
Rele ance: The pape s mus be ele an o he e-
sea ch ques ions and align wi h analysing he ela ion
be ween inancial pe o mance and GHG emissions, as
de e mined by e iewing he i les and abs ac s.
Publica ion S a us: Only pape s ha a e published
and pee - e iewed in enowned jou nals will be con-
side ed.
The exclusion c i e ia au oma ically apply o pape s no
mee ing he abo e inclusion c i e ia. This app oach ensu es
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333306
i y Repo ing Di ec i e (CSRD), which manda e GHG emis-
sion disclosu e o many i ms unde he c i e ia shown in
Chap e 2.2.3. By o e ing cu en in o ma ion on co po a e
GHG emissions in Eu ope and examining he ela ionship be-
ween i m p o i abili y and emission le els, his s udy p o-
ides aluable insigh s o egula o s, company managemen ,
and o he s akeholde s. None heless, he po en ial limi a-
ions o his sys ema ic li e a u e e iew, such as publica ion
o epo ing biases and he sea ch s a egy, migh lead o in-
comple e o misleading conclusions. Fo ins ance, publica-
ion bias could esul in o e ep esen ing s udies wi h signi -
ican indings, while unde epo ing o non-signi ican esul s
migh skew he o e all unde s anding o he ela ionship be-
ween GHG emissions and inancial pe o mance. Addi ion-
ally, he scope and sea ch s a egy employed in his e iew
may ha e inad e en ly excluded ele an s udies, he eby
limi ing he comp ehensi eness and gene alisabili y o he
indings. Such limi a ions necessi a e cau ion in in e p e ing
he esul s and highligh he impo ance o u he esea ch
o alida e and expand upon hese ini ial insigh s.
These indings will be ex ended wi h quan i a i e e-
sea ch explo ed in he second pa o his hesis. Based on
his e iew and a u he discussion on he heo e ical back-
g ound, he exac esea ch hypo heses will be de eloped in
he nex chap e s.
4. Theo e ical Backg ound
Indi idual heo ies do no seem o do jus ice o he com-
plex opic o ac o s in luencing companies’ en i onmen al
pe o mance ou lined in he li e a u e. The e o e, his chap-
e in oduces he Slack Resou ces Theo y, oge he wi h he
Legi imacy and S akeholde Theo y, as heo e ical ame-
wo ks o explain his hesis’ esea ch opic.
4.1. Slack Resou ces Theo y
The i s heo e ical concep his esea ch will be based
on is he Slack Resou ces Theo y, in oduced by Cye and
Ma ch (1963). This heo y posi s ha companies wi h slack
esou ces ha e a g ea e capaci y o adap o change and
in es in oppo uni ies (Bou geois, 1981). Slack esou ces
a e ela ed o i m pe o mance and, mo e speci ically, p o -
i abili y, i ing he a gumen o his hesis (Daniel e al.,
2004; Geo ge, 2005). This heo y makes a solid ounda-
ion o he esea ch ques ions his hesis aims o answe ,
namely, he impac o p o i abili y on companies’ GHG emis-
sions. Wi hin he con ex o his s udy, he assump ion is ha
i ms wi h slack esou ces, he e o e highe p o i abili y, a e
likely o in es mo e in sus ainable ini ia i es, which should
esul in lowe GHG emissions. P e ious esea ch by Oes e-
ich and Tsiakas (2023) has concluded ha mo e p o i able
companies end o emi ewe GHG emissions han less p o -
i able companies. On he o he hand, inancial cons ain s
a e linked o enhanced ca bon emissions (Rehman e al.,
2024). Howe e , i is c ucial o di e en ia e be ween di ec
and indi ec emissions, as he ex en o which companies can
in luence hese wi h hei esou ces a ies signi ican ly.
4.2. Legi imacy and S akeholde Theo y
The Legi imacy Theo y o igina es om Dowling and P -
e e (1975) and posi s ha “o ganiza ions seek o es ablish
cong uence be ween he social alues associa ed wi h o im-
plied by hei ac i i ies and he no ms o accep able beha io
in he la ge social sys em o which hey a e a pa ” (Dowl-
ing & P e e , 1975, p. 122), and has been linked o ex-
plain CSR beha iou o companies in he pas and also e-
cen li e a u e (Bachmann & Ingenho , 2016; J. C. Chen
e al., 2008; Deegan, 2002; Palazzo & Sche e , 2006; Pa -
en, 2020). Fi ms demons a ing highe p o i abili y o en
achie e supe io CSR sco es (Coelho e al., 2023). Acco ding
o he Legi imacy Theo y, his phenomenon can be a ibu ed
o he abili y and inclina ion o p o i able companies o align
wi h p e ailing social alues and no ms. This is also in line
wi h he S akeholde Theo y in oduced by F eeman (1984).
This amewo k highligh s he e olu ion o co po a e ocus
om pu ely economic conce ns o a b oade conside a ion o
a ious s akeholde needs, including en i onmen al and e h-
ical conce ns. Fu he mo e, wi h highe p o i abili y comes
g ea e esponsibili y, which can be explained by mo e signi -
ican s akeholde p essu e and i ms mo e willing o adhe e
o his p essu e (Jakha e al., 2019). Also, he isibili y and
esou ces o p o i able i ms make hem mo e likely o be a -
ge ed by s akeholde demands (Gold e al., 2022). The e o e,
his hesis a gues, ha unde he amewo ks o Legi imacy
and S akeholde Theo y, i ms wi h highe p o i abili y ace
inc eased p essu e om s akeholde s o comply wi h social
no ms, esul ing in lowe GHG emission le els. Howe e , i
is essen ial o no e ha CSR can also imp o e inancial pe -
o mance e e sely, and he ela ion be ween GHG emission
and inancial pe o mance migh go bo h ways, as discussed
in he indings o he SLR.
Building on he Slack Resou ces, Legi imacy and S ake-
holde Theo y, a company’s p o i abili y is expec ed o nega-
i ely co ela e wi h GHG emissions, meaning ha mo e p o -
i able companies a e expec ed o emi less GHG emissions.
This hypo hesis will be o mula ed and expanded in he nex
chap e .
5. Hypo hesis De elopmen
This chap e elabo a es on he analysis and eg ession hy-
po heses o his hesis, based on he indings o he li e a u e
e iew and he heo e ical backg ound.
Be o e he empi ical analysis o he ela ionship be ween
p o i abili y and GHG emissions, he e is a need o unde -
s and he dis ibu ion and ends o GHG emissions in Eu-
ope, including he di e ences be ween each Scope. The e-
o e, he i s esea ch ques ion is as ollows: “Wha a e he
Scope 1, 2 and 3 GHG emissions le els o Eu opean companies
om 2017-2023?”. This o e iew will be he ounda ion o
he wo k on he second esea ch ques ion and help unde -
s and he dynamics o and be ween Scope 1, 2 and 3 GHG
emissions. To accomplish his, he ini ial sec ion will concen-
a e on he emission disclosu es, s a is ics, and dis ibu ion,

Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333 307
highligh ing hei di e en implica ions. Pa icula ly no e-
wo hy will be he examina ion o Scope 3 emissions, as hei
calcula ion emains challenging (Fou e e al., 2024). GHG
ends o e ime and dis ibu ion among sample companies
will u he comple e he analysis. Las ly, a compa a i e anal-
ysis ac oss sec o s and coun ies will be pe o med, as di e -
ences ac oss sec o s and geog aphical loca ions a e expec ed
(Ghose e al., 2023). These insigh s will help o iden i y he
ends in sec o s, companies and coun ies.
The SLR analysed s udies ocusing on he ela ionship be-
ween inancial pe o mance and GHG emissions and ound
ha s udies mos ly ocus on he ela ionship di ec ion o
whe he i “pays o be g een” bu e ealed a lack o s ud-
ies examining he impac o p o i abili y on GHG emissions.
The lack o s udies on his e e se ela ionship, oge he
wi h men ions o po en ial e e se and wo-way causa ion,
was discussed in se e al pape s (Busch & Ho mann, 2011;
Tes a & D’Ama o, 2017; Waddock & G a es, 1997), mo i a -
ing he ollowing analysis. This hesis a gues ha inancial
pe o mance impac s GHG le els, adding o he esea ch
needs o schola s in his ield. Based on he Slack Resou ces,
Legi imacy, and S akeholde heo ies, we hypo hesise ha
p o i abili y signi ican ly nega i ely impac s GHG emissions,
especially ocusing on his di ec ional ela ionship. Fu he -
mo e, mos s udies in he SLR do no dis inguish be ween he
h ee Scopes o GHG emissions. This lack o di e en ia ion
is p oblema ic because he sou ces and implica ions o GHG
emissions a y ex ensi ely ac oss Scopes 1, 2 and 3, equi -
ing di e en app oaches and policies o e ec i e educ ion
(WRI & WBCSD, 2004). This lack o dis inc ion in cu en
li e a u e limi s s akeholde in e p e a ion and ele ance.
Mo i a ed by his gap, we aim o di e en ia e and analyse
he impac o p o i abili y on indi idual Scopes o GHG emis-
sions. Hence, he second esea ch ques ion is o mula ed:
“How does i m p o i abili y impac o al and Scope 1, 2 and
3 GHG emissions pe o mance?”. To answe his ques ion, we
di ided i in o ou sub-hypo heses o dis inguish he e ec s
on o al, Scope 1, Scope 2, and Scope 3 GHG emissions. The
i s hypo hesis we make is he ollowing.
Hypo hesis 1: Fi m p o i abili y is nega i ely asso-
cia ed wi h To al GHG emission le els.
Acco ding o Slack Resou ces Theo y, i ms wi h highe
p o i abili y would ha e mo e inancial esou ces o in es in
GHG emissions educ ion, he e o e sugges ing lowe To al
GHG emissions (Cye & Ma ch, 1963). Hassan and Romilly
(2018) did no ind an impac o economic pe o mance on
emissions, bu o he s udies sugges a nega i e o bidi ec-
ional ela ion (Meng e al., 2023; Tes a & D’Ama o, 2017;
Waddock & G a es, 1997). This ela ion will be es ed wi h
GHG emissions numbe s om LSEG Eikon and a p oxy o
inancial pe o mance. The me ic choice was ROA, he mos
used accoun ing-based me ic in he analysed s udies. Fu -
he me hodological choices will be ou lined in he nex chap-
e .
A signi ican esea ch gap iden i ied is he lack o di e en-
ia ion be ween he h ee GHG emissions Scopes. The e o e,
hypo heses 2, 3, and 4 ocus on he e ec o i m p o i abili y
on speci ic Scopes. The second hypo hesis ocuses on Scope
1 emissions and is o mula ed as ollows.
Hypo hesis H2: Fi m p o i abili y is nega i ely as-
socia ed wi h Scope 1 GHG emission le els.
Scope 1 GHG emissions e e o di ec emissions om
owned o con olled asse s (WRI & WBCSD, 2004). As
highligh ed in ou heo e ical backg ound using he Slack Re-
sou ces Theo y by Cye and Ma ch (1963), highe p o i abil-
i y can allow i ms o in es mo e in educing hese di ec
emissions. Addi ionally, i ms ace p essu e om s akehold-
e s o main ain legi imacy by educing hei GHG emissions
(Dowling & P e e , 1975; F eeman, 1984). In con as o
To al GHG emissions, Scope 1 emissions a e, pe de ini ion,
mo e ela ed o he speci ic i m asse s (WRI & WBCSD,
2004) and speci ic indus ies (Ghasemi e al., 2023), which
migh lead o di e en esul s o his eg ession. Scope
1 GHG emissions a e emi ed mainly by companies wi h
ene gy-in ensi e p ocesses, like in he ene gy, ma e ial, o
manu ac u ing indus y, and he educ ion and po en ial de-
ca bonisa ion s a egies include he shi o low-ca bon uels,
Ca bon Cap u e and S o age (CCS), P ocess Op imisa ion,
and Inno a ion (Ca alie e, 2019). All hese solu ions a e
conside ed esou ce-in ensi e (Ca alie e, 2019) and migh
equi e highe p o i abili y. Ou o i e s udies iden i ied
du ing he SLR app oxima ing ca bon pe o mance h ough
Scope 1 GHG emissions, h ee ha e a nega i e, one a mixed,
and one has no signi ican co ela ion o inancial pe o -
mance, indica ing mixed indings. Howe e , inno a ion
ad an ages educing GHG emissions and imp o ing ope a-
ional e iciency, as sugges ed by Po e ’s win-win Hypo hesis
(Po e & an de Linde, 1995), could also lead o highe
p o i abili y, c ea ing a po en ial wo-way ela ionship and
biasing esul s. Like H1, a nega i e co ela ion be ween i m
p o i abili y and Scope 1 GHG emissions is expec ed, bu
some ca ea s may in luence his ela ion.
The hi d hypo hesis ocuses on Scope 2 GHG emissions
and is he ollowing.
Hypo hesis H3: Fi m p o i abili y is nega i ely as-
socia ed wi h Scope 2 GHG emission le els.
Scope 2 GHG emissions e e o indi ec emissions om
he consump ion o pu chased ene gy (WRI & WBCSD,
2004). Reducing Scope 2 emissions o en equi es swi ching
o enewable ene gy sou ces, which has become cheape
han ossil uel elec ici y in he las ew yea s (IRENA,
2022). Reducing Scope 2 GHG emissions by buying e-
newable ene gy can be bo h cos -sa ing and a demons a-
ion o en i onmen al esponsibili y, making his decision
ela i ely s aigh o wa d o companies. Fu he mo e, e-
ducing Scope 2 emissions is seemingly easie o a company
o achie e han o Scope 1 emissions, which migh lowe
he impac o p o i abili y on his ela ionship (B icheux e
al., 2024). Ano he in luencing ac o o Scope 2 emission
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333308
le els is he ma ke - o loca ion-based calcula ion me hodol-
ogy men ioned in Chap e 2.3.2, which highly in luences he
emission numbe s (b igh es , n.d.; WRI & WBCSD, 2004).
This highligh s he p oblem o ene gy pu chase ag eemen s,
which migh educe he Scope 2 GHG emission wi h he
ma ke -based app oach. Howe e , a local p oduc ion acil-
i y could be ope a ed exclusi ely wi h local CO2-in ensi e
ene gy. The loca ion app oach calcula es Scope 2 emissions
based on he local ene gy mix and p o ides a be e pic u e
o he emissions, bu i is mo e esou ce-in ensi e o be in-
luenced by companies (Ros on e al., 2024). To conclude, a
nega i e co ela ion be ween i m p o i abili y and Scope 2
GHG emissions is an icipa ed, as i ms wi h g ea e inancial
esou ces can eadily educe hese emissions. Howe e , he
impac o p o i abili y is expec ed o be less signi ican o
Scope 2 emissions han o he emission Scopes, as i is in lu-
enced by ac o s such as he company’s sec o , ene gy needs,
and he local ene gy mix.
The ou h hypo hesis ocuses on Scope 3 GHG emissions
and is he ollowing:
Hypo hesis H4: Fi m p o i abili y is nega i ely as-
socia ed wi h Scope 3 GHG emission le els.
Scope 3 GHG emissions a e all o he indi ec emissions
in a company’s alue chain (WBCSD, 2011). While i ms
ha e no di ec in luence on Scope 3 emissions, hey can p es-
su e and inno a e along he en i e supply chain o educe
hei oo p in (Pa chell, 2018), which is expec ed o be mo e
likely wi h mo e esou ces, hus highe i m p o i abili y (Koh
e al., 2023). Howe e , business choices like ou sou cing
hea ily a ec hese emissions, making he calcula ion po-
en ially complex and small-scale (My on, 2020; Radonjiˇ
c
& Tompa, 2018). Fu he mo e, due o he complexi y and
compa abili y challenges associa ed wi h calcula ing and de-
e mining Scope 3 emissions (Fou e e al., 2024), a high
numbe a iance is expec ed, which could nega i ely in lu-
ence he eg ession pe o mance. Scope 3 emissions a e also
highly dependen on he indus y and he company’s p od-
uc s (Gün he e al., 2015). Cu en ly, o he bes o he au-
ho ’s knowledge, no s udies ha e examined he co ela ion
be ween Scope 3 emissions and inancial pe o mance, mak-
ing his a no el pe spec i e. The impac o p o i abili y on
Scope 3 emissions is expec ed o be nega i e i he da a si u-
a ion allows o a signi ican eg ession model.
Acco dingly, he null hypo hesis o H1,H2,H3 and H4 is
o mula ed as ollows, and would indica e ha p o i abili y is
no o posi i ely associa ed wi h he espec i e GHG emission
ca ego y:
Hypo hesis H0: Fi m p o i abili y is no nega i ely
associa ed wi h To al GHG, Scope 1, Scope 2 o
Scope 3 emission le els.
Ha ing es ablished he hypo heses o be es ed in e-
sponse o he second esea ch ques ion, he subsequen chap-
e will delinea e he me hodological amewo k adop ed o
his s udy.
6. Me hodology
This chap e ou lines he me hodological app oach o
analysing GHG emissions om Eu opean companies, which
a e used o add ess bo h esea ch ques ions. I begins wi h
an o e iew o he sample companies and he da a collec-
ion, ollowed by a discussion o he selec ion o dependen ,
independen , and con ol a iables. The chap e hen de ails
he model speci ica ions used o eg ession analysis, ocus-
ing speci ically on answe ing he second esea ch ques ion:
How does i m p o i abili y impac o al and indi idual Scope
1, 2 and 3 GHG emissions?
6.1. Sample and Da a Collec ion
In o de o p o ide an o e iew o Scope 1, 2 and 3 GHG
emissions o Eu opean companies and analyse he impac o
p o i abili y on hese GHG emissions, we op ed o he com-
panies in he STOXX Eu ope 600 index as ou sample. The
STOXX Eu ope 600 ep esen s he 600 la ges companies in
17 Eu opean and is well di e si ied by indus ies (STOXX,
2024). Fu he mo e, Eu ope is s ill seen as a pionee in sus-
ainabili y epo ing and en i onmen al esponsibili y (Ba bu
e al., 2022), which makes us expec solid and compa a-
ble da a. The da a will be collec ed om he LSEG Eikon
da abase o he inancial yea s 2017 o 2023, as 2017 ma ks
he i s yea he NFRD egula ion became manda o y in Eu-
opean Union membe s a es and is a signi ican miles one o
non- inancial epo ing (Eu opean Union, 2014). The GHG
emission a ia ion du ing he COVID-19 pandemic yea s may
pose a challenge (A. Kuma e al., 2022). Howe e , he ime
ho izon o 7 yea s will help o ge consis en esul s and is no
a away om he a e age ime ho izon o 9.2 yea s iden i ied
in he SLR. All ele an da a poin s o his esea ch we e ini-
ially accessed h ough he LSEG Eikon pla o m o minimise
he use o mul iple sou ces and ely on sys ema ically sou ced
in o ma ion. Howe e , GHG emissions da a o mos i ms o
he yea 2023 was no a ailable in he LSEG Eikon da abase.
Consequen ly, i a ailable, he 2023 GHG emissions da a was
manually collec ed om annual o sus ainabili y epo s o
all i ms wi h missing alues. The GHG emission igu es we e
e iewed and upda ed du ing da a collec ion o accoun o
any e oac i e changes in p e ious yea s. This s ep was nec-
essa y o ensu e accu acy, as changes in companies’ calcu-
la ion me hods some imes esul ed in signi ican de ia ions.
The ull da ase is a ailable in Appendix 1.
6.2. Dependen Va iables
Al hough he e is ex ensi e li e a u e on he impac o
GHG emissions on inancial pe o mance, ice e sa, i is
no he case. Acco dingly, he dependen a iables will be
he GHG emissions ac oss all Scopes o sample companies,
collec ed o he inancial yea s 2017 o 2023. In line wi h
he ou hypo heses, ou dependen a iables ep esen ing
he GHG emissions a e used. Schola s ha e used absolu e
and ela i e measu es o GHG, as highligh ed in he SLR.
This esea ch will be based on absolu e emissions le els, as
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333 309
used by Mahapa a e al. (2021) o Po les-Ochoa and Gue-
a a (2023), because, ul ima ely, only a educ ion o absolu e
GHG emissions can educe clima e change. The ou depen-
den a iables o each hypo hesis a e, he e o e, To al GHG
emissions, ep esen ing he sum o Scope 1, 2 and 3 emis-
sions (To al GHG) o Hypo hesis 1, Scope 1 GHG emissions
(Scope 1) o Hypo hesis 2, Scope 2 GHG emissions (Scope 2)
o Hypo hesis 3 and Scope 3 GHG emissions (Scope 3) o
Hypo hesis 4.
6.3. Independen Va iables
As an analysis o he impac o p o i abili y on he de-
penden a iables is he aim o his s udy, P o i abili y is he
independen a iable o he eg essions. Howe e , he e is
no clea consensus on how o app oxima e p o i abili y in li -
e a u e, bu Re u n on Asse s (ROA) is seen as a common
me ic o an accoun ing-based, sho - e m measu e o inan-
cial pe o mance (Benk aiem e al., 2023; Busch e al., 2022;
Delmas e al., 2015; Feng e al., 2024), and Tobin’s Q as a
common me ic o a ma ke -based measu e o long- e m i-
nancial pe o mance (Busch e al., 2022; Hassan & Romilly,
2018; Houqe e al., 2022; K. H. Lee e al., 2015). Conside -
ing p o i abili y as he independen a iable, an accoun ing-
based measu e o p o i abili y is mo e app op ia e han a u-
u e expec a ion-based ma ke me ic like Tobin’s Q, which is
based on expec a ions a he han ac ual p o i s. The e o e,
p o i abili y will be app oxima ed by ROA, calcula ed as ne
income by o al asse s. Fu he mo e, o check he obus ness
o ou eg ession, we will also es ou hypo heses wi h ROE,
calcula ed as ne income by sha eholde s’ equi y and las ly,
ROS as ne income di ided by sales.
6.4. Con ol Va iables
S udies in es iga ing he ela ionship be ween inancial
pe o mance and ca bon pe o mance, as iden i ied in he
SLR, ha e used a common se o con ol a iables (see Chap-
e 3.2.3) and he ones used o his eg ession analysis a e
ou lined subsequen ly. This s udy implemen s ou con ol
a iables o accoun o o he e ec s nex o p obabili y, in-
luencing GHG emissions. Fi s , i m size (SIZE) has been
linked o be e socially esponsible beha iou (Waddock &
G a es, 1997), and we use he na u al loga i hm o he i m’s
e enues o de ine his me ic (Al a ez, 2012; F ança e al.,
2023). Second, as discussed by Vel e (2023), boa d di e -
si y (BOARDDIV) can d i e GHG emissions pe o mance. I
will, he e o e, be included as a con ol a iable, calcula ed
as a pe cen age numbe o women o o al boa d membe s.
Thi d, capi al expendi u es is ound o be an indica o o
GHG emissions (Xia & Cai, 2023), and he ela i e mea-
su e o capi al in ensi y (CAPINT), calcula ed as CAPEX di-
ided by o al sales, is used in nume ous s udies (Busch e
al., 2022; Desai e al., 2021; Meng e al., 2023). Addi ion-
ally, sales g ow h (GROWTH) is he las con ol a iable ha
accoun s o he po en ial inc eased GHG emissions associ-
a ed wi h ou pu g ow h. Sales g ow h is calcula ed as pe -
cen ual annual changes in sales, in line wi h simila s udies
(Desai e al., 2021; Gallego-Al a ez e al., 2015; Ghose e
al., 2023; Lewandowski, 2017). Fu he mo e, he indus y
ype o a company is undeniably a signi ican de e minan o
he amoun o GHG emissions (Ri chie e al., 2020), which is
why a classi ica ion in Low and High-Emission-Sec o s is pe -
o med. The 11 sec o s om he GICS sec o classi ica ion
a e used and di ided in o bo h ca ego ies. Consume disc e-
iona y, ene gy, indus ials, ma e ials, and u ili ies as High-
Emission-Sec o s, acco ding o MSCI (2023) and he sec o
analysis pe o med la e in Chap e 7.1.2. Financials, in o -
ma ion echnology, consume s aples, eal es a e, commu-
nica ion se ices and heal h ca e, as Low-Emission-Sec o s.
The me hod wi h which hese sec o s will be accoun ed o
is discussed in he model speci ica ion chap e , as an in a i-
an dummy a iable is no sui ed o he planned ixed-e ec
eg essions model (Woold idge, 2012, p. 484-492).
6.5. Model Speci ica ions
To es he hypo heses ega ding he impac o i m p o -
i abili y on GHG emissions, we will employ mul iple linea
eg ession models using an O dina y Leas Squa es (OLS)
app oach (G eene, 2019). As Shahgholian (2019) no es in
a li e a u e e iew s udy, endogenei y be ween dependen
and independen a iables is a signi ican isk in he anal-
ysed ela ionship, 48 ou o 80 s udies o hei li e a u e e-
iew check o endogenei y. Because panel da a om 2017
o 2023 is used, a ixed e ec s model is chosen o con ol o
i m he e ogenei y and endogenei y o a iables ha could
bias he esul s, such as indus y-speci ic e ec s o inhe en
company policies owa ds sus ainabili y ha do no change
o e ime (G eene, 2019). Fu he mo e, he Hausman es
will be pe o med o es he ixed-e ec s agains andom-
e ec s and deduce he p ope i o he model (Hausman,
1978).
This app oach allows o es o be ween-company a i-
a ions o e he s udy pe iod and is used by se e al s udies
wi h simila panel da a (Iwa a & Okada, 2011; Lewandowski,
2017; J. Wang e al., 2021), p o iding a mo e accu a e es-
ima ion o he ela ionship be ween p o i abili y and GHG
emissions. Li e a u e and publica ions ag ee ha indus y
is a signi ican de e minan o GHG emissions. Howe e ,
a ixed-e ec model canno p ocess such an en i y in a i-
an a iable sepa a ely in he model, only in combina ion
wi h all he o he po en ial ixed-e ec s. Since a ying e -
ec s be ween Low- and High-Emission-Sec o s a e expec ed,
he da ase will be spli in o wo pa s: en i ies om Low-
Emission-Sec o s and en i ies om High-Emission-Sec o s,
simila o he app oach o Ghose e al. (2023). This sepa a-
ion accoun s o he expec ed di e ences be ween hese sec-
o s, as no ed in he li e a u e (Ghasemi e al., 2023). Each
eg ession model will be pe o med sepa a ely on he high-
emission and low-emission da ase s and compa ed agains
each o he ’s.
The ixed-e ec s eg ession models o each dependen
a iable a e speci ied as ollows:
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333310
H1: To al GHGi =β1ROAi +β2SI Z Ei +β3BOARDDIVi
+β4CAPIN Ti +β5GROW T Hi +µi+ϵi
H2: Scope 1i =β1ROAi +β2SI Z Ei +β3BOARDDIVi
+β4CAPIN Ti +β5GROW T Hi +µi+ϵi
H3: Scope 2i =β1ROAi +β2SI Z Ei +β3BOARDDIVi
+β4CAPIN Ti +β5GROW T Hi +µi+ϵi
H4: Scope 3i =β1ROAi +β2SI Z EEi +β3BOARDDIVi
+β4CAPIN Ti +β5GROW T Hi +µi+ϵi
Whe e:
•β1,β2,β3,β4and β5a e he coe icien s o he inde-
penden and con ol a iables.
•µi ep esen s he unobse ed company-speci ic ixed
e ec s.
•ϵi is he e o e m.
The eg ession esul s will be in e p e ed based on he
coe icien s’ sign, magni ude, and s a is ical signi icance. The
p ima y ocus will be on he coe icien o ROA o unde s and
i s impac on GHG emissions ac oss all Scopes. A nega i e co-
e icien would suppo he hypo hesis ha highe p o i abil-
i y is associa ed wi h lowe GHG emissions. Con ol a iables
will also be in e p e ed o unde s and hei in luence on GHG
emissions. The nex chap e will now s a wi h he analysis
o he collec ed da ase .
7. Analysis and Resul s
This chap e is di ided in o wo sec ions ep esen ing he
wo esea ch ques ions ele an o his wo k and will ocus
on he quan i a i e and empi ical analysis o he collec ed
panel da a. The i s chap e will analyse he Scope 1, 2 and
3 GHG emissions o Eu opean companies, and he second
chap e will ocus on he impac o p o i abili y on hese GHG
emission Scopes.
7.1. Quan i a i e Analysis: Scope 1, 2 and 3 GHG Emissions
in Eu ope
Be o e del ing in o an in-dep h analysis o Scope 1, 2 and
3 emissions, p o iding a b ie in oduc o y o e iew o he
GHG emissions disclosu es ac oss he sample companies is
essen ial. The ollowing chap e s will ocus on he dis inc-
ion be ween he indi idual Scope 1, 2 and 3 GHG emissions
igu es wi hin he da ase . Be o e a de ailed analysis o hese
igu es, an o e iew o he da a’s quali y and quan i y will be
p o ided. This o e iew will be he ounda ion o a mo e
de ailed examina ion o he emission numbe s.
7.1.1. O e iew o he GHG Emission Disclosu es
As p e iously highligh ed, he high quali y and a ailabil-
i y o da a we e an icipa ed due o s ingen Eu opean eg-
ula ions, Eu ope’s dominan ole in sus ainabili y epo ing,
and co esponding esea ch in Eu ope (Singhania & Chadha,
2023). An ini ial indica o o his da a quali y is he num-
be o da a poin s a ailable o each company and each yea ,
illus a ed in Figu e 7.
A clea end o inc easing da a a ailabili y o e he yea s
is obse able, as many companies disclose hei GHG emis-
sions ac oss all Scopes. These esul s complemen he ind-
ings o Ba bu e al. (2022), which analysed he e olu ion o
non- inancial epo ing and he impac o he NFRD on dis-
closu es o Eu opean companies and ound a posi i e in lu-
ence o e ime. The sligh dec ease in da a poin s o 2023
can likely be a ibu ed o he manual collec ion o da a om
annual and sus ainabili y epo s a he han o an ac ual de-
cline in da a poin numbe s. Wi h a maximum o 600 da a
poin s pe Scope, cons ained by he numbe o companies
in he STOXX Eu ope 600 index, 98% epo ed hei Scope 1
and Scope 2 GHG emissions in 2022, and 89% epo ed hei
Scope 3 emissions. No ably, Scope 3 emissions we e signi i-
can ly less equen ly published han Scope 1 and Scope 2 in
he ini ial yea s, bu his dispa i y has ma kedly na owed
ecen ly. The same goes o he o he Scopes, whe e a high
disclosu e inc ease has occu ed. A posi i e end was ex-
pec ed since all companies o ou sample will be equi ed o
disclose hei GHG emissions ac oss he h ee Scopes when
he CSRD comes in o ac ion o he FY2024 disclosu es (Eu-
opean Union, 2022). Ha ing add essed he a ailabili y o
he da a, we shall now examine he epo ed igu es in dep h.
7.1.2. Analysis o he Scope 1, 2 and 3 GHG Emissions
This chap e commences wi h a desc ip i e s a is ical
analysis o he da ase o p o ide an o e a ching iew o he
da a. Subsequen ly, a end analysis is conduc ed o compa e
he dynamics o Scope 1,Scope 2 and Scope 3 emissions o e
ime. Finally, a compa a i e analysis by sec o and coun y is
pe o med be o e he chap e s end wi h a b ie conclusion.
Desc ip i e S a is ics
Be o e del ing deepe in o he da a, i is essen ial o ex-
amine some basic s a is ics o be e unde s and he da ase .
Table 2p o ides an o e iew o he mos impo an numbe s,
which allows o he i s insigh s.
Based on he mean emission numbe s o each Scope o e
2017–2023, i is possible o calcula e he a e age sha e o
o al emissions o all Scopes. Figu e 8 isualises he a e -
age o al epo ed GHG emissions sha es and shows he size
di e ences be ween he h ee Scopes.
Scope 3 emissions ha e by a he mos signi ican sha e o
all h ee scopes, making up 88.5% o a e age To al GHG emis-
sions, which is in line wi h expec a ions and indings in he
li e a u e (Ma hews e al., 2008). Scope 1 GHG Emissions,
also called di ec emissions a e di ec ly emi ed by he com-
panies and accoun o abou 9,5%, and Scope 2 ep esen s
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333 311
Figu e 7: Numbe o Scope 1, 2 and 3 Da a Poin s pe Yea
Table 2: Summa y o S a is ics o Scope 1, 2 and 3 GHG Emissions (in ons CO2e)
Emission Types N Mean SD Min 25% Median 75% Max
Scope 1 3,722 2,611,755 12,406,433 0 4,859 33,833 269,580 179,700,000
Scope 2 3,720 431,302 1,425,410 0 8,513 46,078 225,205 22,057,000
Scope 3 3,113 24,466,782 126,861,683 0 31,500 539,638 6,300,000 2,823,000,000
Figu e 8: A e age Sha e o he Th ee Scopes o To al Repo ed GHG Emissions
he pu chased ene gy by companies, which ep esen s he
smalles po ion o To al GHG emission in he sample, wi h
abou 2,0%. Fu he mo e, he wide ange o alues ac oss all
Scopes is no able, o example, wi h Scope 1 emissions whe e
alues be ween he 25 h and 75 h pe cen iles di e by a ac-
o o 55. This a iabili y is expec ed, gi en he signi ican
di e ences in he sizes o he companies wi hin he STOXX
Eu ope 600 index. Howe e , his ex ensi e ange p esen s
challenges o eg ession analysis pe o med in la e chap-
e s, as i can lead o he e oscedas ici y (Gallego-Al a ez e
al., 2015). To add ess his issue, we will apply na u al loga-
i hms o he emission alues in ou eg essions, as discussed
in Chap e 6.2. This ans o ma ion will help no malise he
da a and mi iga e he impac o ex eme alues (Woold idge,
2012). To ensu e he compa abili y and quali y o GHG emis-
sion da a, he a iance wi hin en i ies is a c ucial me ic, as
i helps o unde s and he de ia ion o hese numbe s om
he mean. In his con ex , a high a iance would sugges sig-
ni ican a iabili y in GHG emissions ac oss a speci ic Scope
wi hin an en i y and o e ime, po en ially unde mining he
eliabili y o he da a o indica ing signi ican changes in he
calcula ion me hodology. As men ioned in Chap e 5, we ex-
pec some challenges in he da a quali y o Scope 3 emissions,
as he calcula ion is complex and allows o a highe ma gin
o disc e ion han Scope 1 and Scope 2 emissions. Figu e 9
ep esen s he s anda d de ia ion (SD) as a pe cen age o he
mean wi hin he GHG emission numbe s o each en i y in he
da a se om 2017 o 2023, and a clea di e ence be ween
he Scopes can be seen.
The lowes s anda d de ia ion is obse ed o Scope 1
emissions, wi h an a e age o 29.63% de ia ion om he
mean, ollowed by Scope 2 emissions a 37.41%. In con as ,
Scope 3 emissions exhibi a signi ican ly highe s anda d de i-
a ion o 56.15%, indica ing conside able a iance among he
Scope 3 alues epo ed wi hin companies o e ime. Du ing
he manual collec ion o he la es 2023 alues, his high de-
ia ion became appa en and is likely due o he lack o clea
guidance, incomple e composi ion, and measu emen di e -

Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333312
Figu e 9: Compa ison o he SD o Emissions as Pe cen age o he Mean by En i y
gence, h ee main p oblems ci ed by Nguyen e al. (2023),
which s udied he da a quali y o Scope 3 emissions. The
g aph shows ha he s anda d de ia ion dis ibu ion o Scope
3emission is less le skewed han o Scope 1 and Scope 2,
indica ing mo e ex eme alues and unde sco ing he need
o u he s anda disa ion o Scope 3 emission epo ing o
enhance compa abili y in he u u e. Despi e he high luc u-
a ions in Scope 3 emissions, he numbe o companies pub-
lishing all h ee scopes is p omising a a ound 89% in 2022,
which should allow us o conduc solid analyses a e wa d. In
he nex sec ion, we will look a s iking ends in he da ase .
Emission T ends by Scopes
In his analysis, shown in Figu e 10, he ends in Scope
1,Scope 2, and Scope 3 GHG emissions om Eu opean com-
panies om 2017 o 2023 a e examined. These indings al-
low us o gain insigh s in o he ca bon pe o mance o hese
companies and will ideally iden i y a end o nega i e GHG
emissions g ow h. Howe e , be o e del ing in o hese ends,
i is c ucial o highligh ce ain peculia i ies o he unbal-
anced panel da a o a oid alse in e p e a ions. Speci ically,
he numbe o companies epo ing hei GHG emissions has
inc eased o e he yea s, making i imp ac ical o analyse he
end in o al emissions o e he en i e ime ame, as i would
dis o he esul s. Consequen ly, a iables independen o
he o al numbe o epo ing companies each yea ensu e a
mo e meaning ul analysis. To a oid he p oblem o ou lie s,
he median g ow h a es o all h ee Scopes o e he yea s
a e plo ed in Figu e 10, which o e s in e es ing insigh s.
The ini ial obse a ion is he p onounced decline in
g ow h a es in 2020, ma ked by nega i e g ow h a es o
-8.89% o Scope 1, -10.45% o Scope 2, and -10.28% o
Scope 3 GHG emissions. This decline was ollowed by a sub-
sequen eco e y beginning in 2021. In 2022 and 2023, he
ends no malised, showing sligh ly nega i e g ow h a es
o Scope 1 and Scope 2 GHG emissions, while Scope 3 emis-
sions exhibi ed a g ow h a e o app oxima ely 1%. The
exac g ow h a es can be ound in Table 10 o Appendix 2.
The sha p decline in GHG emission le els in 2020 is in line
wi h expec a ions o he e ec s o he COVID-19 Pandemic.
A. Kuma e al. (2022) analysed he impac o COVID-19 on
GHG emissions and ound simila esul s. These esul s we e
a ibu ed, among o he ac o s, o a decline in ene gy con-
sump ion, mobili y, ade, and economic ou pu (A. Kuma
e al., 2022). In conclusion, he analysis e eals ha Scope
1and Scope 2 emissions ha e nega i e median g ow h a es
be ween 2017 and 2023, egis e ing a -2.02% and -5.44%,
espec i ely. In con as , Scope 3 emissions exhibi ed a me-
dian annual g ow h a e o 1.37%, which can p obably be
a ibu ed o he inc easingly comp ehensi e me hodologies
employed in he calcula ion basis and he o he challenges
o Scope 3 GHG emissions men ioned in Chap e 2.3.2 and 5.
Absolu e Emission Le els by Companies
As men ioned, he absolu e sum o GHG emissions pe
yea is no a iable me ic o unbalanced panel da a. How-
e e , some absolu e emission da a compa ison would p o ide
aluable insigh s in o he bigges GHG emi e s o he STOXX
Eu ope 600 index. To accoun o unbalanced numbe s o en-
ies pe company, we op ed o he a e age sum o Scope 1
and Scope 2 GHG emissions and he a e age e enues o e
he ime ame, plo ed in Figu e 11, helping o isualise sig-
ni ican ou lie s. Scope 1 and 2emissions a e, pe de ini ion,
he ones di ec ly a ibu able o a i m. The e o e, he combi-
na ion is an o en-used me ic o compa e GHG emission le -
els ac oss companies. These emissions a e isualised agains
he a e age e enues o each company o p o ide a i m size
me ic as o ien a ion.
Figu e 11 illus a es he dis ibu ion o Scope 1 and Scope
2GHG emissions among Eu opean companies. The da a in-
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333 313
Figu e 10: Median G ow h Ra es pe Yea , pe Scope
Figu e 11: A e age Scope 1 +2 Emissions s Re enues (2017-2023)
dica es ha mos companies gene a e low o medium GHG
emissions. Howe e , a signi ican po ion o he emissions is
concen a ed among a small numbe o ou lie s. Speci ically,
he op en companies wi h he highes emissions ha e been
iden i ied and labelled in he igu e. Among hese, se en
companies belong o he ene gy sec o , while he emaining
h ee a e in he ma e ials sec o , wi h wo specialising in ce-
men p oduc ion and one in s eel manu ac u ing. A epo
published by he CDP suppo s hese indings, showing ha
100 companies om he ossil uel sec o ha e been espon-
sible o o e 70% o indus ial GHG emissions since 1988
(G i in, 2017). In e es ingly, when To al GHG ins ead o
Scope 1 +2emissions is plo ed, he op 10 ou lie s change
subs an ially. Figu e 15 shows his plo and can be ound in
Appendix 2. A e adding Scope 3 GHG emissions, he ene gy
sec o is s ill dominan , bu he ma e ials sec o no anymo e.
Fi ms wi h high ossil uel consump ion in hei p oduc li e
cycles p edomina e he lis , including Ai bus SE, Volkswagen
AG, Siemens Ene gy, Siemens AG and Rolls-Royce Holdings
PLC.
This dis ibu ion sugges s ha indus y ype and asso-
cia ed business models play a c ucial ole in de e mining a
company’s emission le els. I is also he eason o he deci-
sion o analyse he impac o p o i abili y on GHG emissions
on low- and high-emission companies sepa a ely. To u he
explo e he ela ionship be ween indus y sec o s and emis-
sions, he ollowing chap e will examine he dis ibu ion o
GHG emissions ac oss a ious Eu opean sec o s in g ea e de-
ail.
Sec o Analysis
Ha ing obse ed ha companies wi hin he ene gy and
ma e ials sec o s exhibi signi ican ly highe GHG emissions
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333314
han hose being in o he sec o s, GHG emissions ac oss di -
e en sec o s in he sample a e examined, because hey a e
seemingly majo de e minan s o absolu e GHG emissions.
Ins ead o using a e age igu es as in he p e ious chap e ,
his indus y analysis will ely on he mos ecen da a om
2023. To acili a e meaning ul compa isons wi hou exces-
si e g anula i y, we ha e adop ed he Global Indus y Clas-
si ica ion S anda d (GICS), ca ego ising companies in o 11
sec o s. This classi ica ion is widely u ilised by inancial p o-
essionals, in es o s, and esea che s due o i s consis ency
and comp ehensi eness (Bhoj aj e al., 2003). The GICS 11-
sec o amewo k balances a oiding excessi e agmen a ion
and cap u ing essen ial dis inc ions among di e en sec o s.
Figu e 12 shows he Scope 1, 2 and 3 GHG emissions dis i-
bu ion ac oss all 11 sec o s o 2023.
Fo Scope 1 emissions, displayed in Figu e 12, he sec o s
ma e ials, u ili ies, ene gy, and indus ials a e esponsible o
app oxima ely 94.65% o he o al Scope 1 emissions, lea ing
he emaining se en indus ies o accoun o only 5.35%.
This sugges s ha hese ou sec o s signi ican ly con ibu e
o di ec emissions h ough hei business models, a ac also
obse ed by o he emissions epo s (Polizu e al., 2023). In
con as , o Scope 2 emissions, he ma e ials sec o is he
mos signi ican con ibu o , esponsible o abou 45.61% o
he o al Scope 2 emissions. This indica es ha companies in
his sec o pu chase subs an ial amoun s o ene gy o hei
business ac i i ies. The emaining emissions a e mo e e enly
dis ibu ed ac oss he o he sec o s compa ed o Scope 1 emis-
sions. U ili ies ank second wi h 13.76%, while all o he in-
dus ies con ibu e less han 10% o Scope 2 emissions. Scope
3emissions, also e e ed o as alue-chain emissions, ha e
only gained a en ion in ecen yea s, when he GHG P o o-
col published he Co po a e Value Chain (Scope 3) s anda d
in 2011 (WBCSD, 2011). Howe e , hei signi icance in he
con ex o global GHG educ ion is subs an ial (Ma hews e
al., 2008). As demons a ed in Chap e 7.1.2,Scope 3 GHG
emissions cons i u e app oxima ely 90% o he To al GHG
emissions o companies wi hin he STOXX 600 Eu ope in-
dex. Consequen ly, hei educ ion is c ucial o a ain he
goals o he Pa is Ag eemen (Uni ed Na ions, 2015a) and
he esponsibili y lies wi h he companies and hei espec i e
business models. The sec o s causing he highes amoun s
o Scope 3 GHG emissions a e indus ials (32.79%), ene gy
(27.72%), ma e ials (13.68%), and consume disc e iona y
(13.22%). The consume disc e iona y sec o includes ma-
jo au omo i e i ms like Me cedes-Benz, Vol o, BMW, S el-
lan is, and Volkswagen, which epo high Scope 3 emissions
due o he emissions in hei alue-chain and p oduc li e cy-
cles (Wells & Nieuwenhuis, 2012). Simila o he dis ibu ion
obse ed o Scope 1 emissions, a ew sec o s a e esponsible
o mos GHG emissions.
In addi ion o examining he dis ibu ion o o al emis-
sions by sec o , analysing GHG emission g ow h a es pe sec-
o se es as a aluable complemen , as i shows he cu en
ends. Figu e 13 p esen s an o e iew o he median g ow h
a es o all h ee Scopes ac oss he 11 GICS sec o s, wi h he
numbe o da a poin s pe indus y depic ed in he Scope 1
his og am. Be ween 133 and 805 da a poin s ep esen each
sec o o e he pe iod om 2017 o 2023. This subs an ial
da ase ensu es he obus ness o he median agains ou lie s
and p o ides meaning ul insigh s in o he ends o GHG e-
duc ion pe o mance ac oss di e en sec o s.
The igu es e eal ha g ow h a es o Scope 1 and
Scope 2 emissions a e nega i e ac oss all sec o s, albei wi h
a ying magni udes. No ably, he inancial sec o exhibi s
he highes educ ion a es o bo h ypes o emissions. Fo
Scope 1 emissions, he high-emission sec o s, as shown in
Figu e 13, display ela i ely modes a es o decline be ween
0% and -1,5%, wi h he u ili ies sec o as an ou lie in he
g oup, achie ing he hi d bes educ ion a e a app oxi-
ma ely 5%. Con e sely, Scope 2 emissions show signi ican ly
highe educ ion a es ac oss all sec o s. This sugges s ha
companies may ind i easie o mi iga e Scope 2 emissions
han Scope 1 emissions, pa icula ly in ene gy-in ensi e sec-
o s such as ma e ials, ene gy, and indus ials. Imp o ing
Scope 1 emissions o en equi es enhancing he ene gy e -
iciency o indus ial p ocesses, while Scope 2 educ ions
can be mo e easily achie ed h ough g een ene gy pu chase
ag eemen s, as highligh ed by McKinsey in hei epo on
he consume goods indus y (B icheux e al., 2024), o a
lowe ene gy g id GHG oo p in . Rega ding Scope 3 emis-
sions, he g ow h a es o mos sec o s a e posi i e, aligning
wi h he ends discussed in Chap e 7.1.2. Unexpec edly,
he in o ma ion echnology sec o demons a es he highes
g ow h a es by a conside able ma gin. This anomaly may
indica e ha some companies ha e e ised hei assessmen
me hodologies, leading o a highe a ibu ion o Scope 3 in
his sec o . The shi o cloud se ices by many IT companies
could also be he eason o his end, as such emissions
a e ca ego ised as Scope 3 unde he GHG P o ocol (WBCSD,
2011). This phenomenon has been p e iously examined in
he li e a u e (My on, 2020), and he esul s depic ed in
Figu e 13 ma ch hese indings.
In conclusion, as obse ed in he p e ious chap e e-
ga ding company-speci ic emissions le els, he sec o analy-
sis shows ha a limi ed numbe o sec o s and companies a e
esponsible o mos GHG emissions. F om bo h egula o y
and esea ch pe spec i es, ocusing on hese high-emission
sec o s is ad isable, as hey each equi e ailo ed solu ions
based on hei speci ic business models and ypes o emis-
sions. This de elopmen could also be obse ed in he SLR
pe o med in he ea lie chap e s, whe e abou one-qua e
o he s udies ocused solely on companies in CO2-in ensi e
sec o s. Fu he mo e, egula ions and policies ha e been in-
c easingly a ge ed a hese high-emission indus ies, wi h
success ul emission educ ions (Pan e al., 2024; Yin e al.,
2024), which also speaks in a ou o ou indings and he
willingness o educe global GHG emissions. In summa y, he
nega i e g ow h a es obse ed a e encou aging in he con-
ex o comba ing clima e change. Howe e , his s udy does
no assess whe he hese ends align wi h he clima e a ge s
ou lined in he Pa is Ag eemen . Addi ionally, he signi ican
inc ease in Scope 3 emissions wi hin he IT sec o highligh s
he po en ial o companies o shi hei Scope 1 o Scope 2
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333 315
Figu e 12: Dis ibu ion o Scope 1, 2 and 3 GHG Emissions ac oss he GICS Sec o s
Figu e 13: Median G ow h Ra es pe Sec o , pe Scope
emissions h ough business p ac ices. This unde sco es he
impo ance o accu a ely accoun ing o Scope 3 emissions
o ob ain a comp ehensi e pic u e o a company’s en i on-
men al impac . Add essing hese issues equi es he collab-
o a ion o policymake s, egula o s, and o he s akeholde s,
who mus espond swi ly o eme ging ends ac oss a ious
sec o s, making his sec o analysis wi h he la es numbe s
om 2023 a aluable sou ce o in o ma ion.
In he concluding sec ion o his analysis, we will in es i-
ga e coun ies’ Scope 1, 2 and 3 GHG emissions.
Coun y Analysis
In his chap e , we will analyse he g ow h a es o compa-
nies wi hin he STOXX Eu ope 600 index by coun y. Consis-
en wi h he me hodology employed in he p e ious chap e ,
he median g ow h a e has been used as he benchma k. The
coun y-speci ic analysis in Figu e 14 pa allels he indus y-
speci ic b eakdown ac oss all h ee Scopes o emissions.
No ably, Scope 1 emission educ ion a es a e gene ally
lowe han hose o Scope 2 emissions, wi h excep ions
obse ed in coun ies such as Poland, I aly, and Belgium.
Acknowledging ha he STOXX Eu ope index encompasses
only a limi ed selec ion o companies pe coun y is essen-
ial. Thus, he p o ided cha o e s insigh s speci ic o hese
companies a he han he na ional economy. In he case o
Scope 3 emissions, i is no ewo hy ha Ge many exhibi s
a nega i e median g ow h a e despi e ha ing a signi ican
numbe o companies ep esen ed. This sugges s ha Ge -
man companies, o he indus ies p e alen in Ge many,
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333322
Table 6: Reg ession Resul s o Hypo hesis H2
Dependen a iable
Scope 1 Low-Emission-Sec o s High-Emission-Sec o s
Independen Va iables Coe icien P-Value Coe icien P-Value
In e cep 3.547 0.185 5.823 ** 0.017
ROA 0.358 0.399 0.627 * 0.084
SIZE 0.254 ** 0.038 0.281 *** 0.009
BOARDDIV -0.572* 0.054 -0.435 0.177
CAPINT 0.186 0.537 0.460 0.128
GROWTH -0.021 0.805 -0.046 0.574
No. Obse a ions: 1,245 1,279
No. En i ies: 267 271
F-s a is ic ( obus ): 2.502 3.830
P-Value: 0.029 0.002
R2(Be ween): 0.143 0.122
decision-making. This adds o simila indings o Hossain e
al. (2023) and Muk adi -Al-Muki and Bhaiya (2024), which
ound a nega i e ela ion be ween boa d di e si y and GHG
emission le els. The coe icien o ROA is posi i e bu no
signi ican , wi h a p- alue o 0.399, indica ing ha p o i abil-
i y migh no ha e a meaning ul e ec on Scope 1 emissions in
Low-Emission-Sec o s, which could be due o he same eason
men ioned in Hypo hesis H1. Namely, he selec ed a iables
can only minimally explain he le el o Scope 1 GHG emis-
sions, o he absolu e le el o hese emissions needs o be
la ge o ind u he signi ican ela ion. These indings sug-
ges ha companies’ p o i s in Low-Emission-Sec o s a e no
o less linked o business p ac ices causing GHG emissions.
The model is s a is ically signi ican in he High-Emission-
Sec o s wi h an F-s a is ic p- alue o 0.002. Howe e , sim-
ila ly o he Low-Emission-Sec o s, he model’s explana o y
powe is limi ed, as indica ed by a lowe R2 alue o 0.122.
He e, ROA shows a posi i e coe icien o 0.627, which is sig-
ni ican a he 10% le el (p- alue o 0.084). I is no signi -
ican a he a ge ed 5% signi icance bu s ill con as s wi h
i s nega i e impac on To al GHG emissions seen in Hypo he-
sis H1. This sugges s ha high p o i abili y may no ansla e
in o educed di ec emissions in High-Emission-Sec o s. Possi-
bly due o he unde lying business models, wi h a con inued
eliance on ca bon-in ensi e ope a ions, challenging o de-
ca bonise (Ca alie e, 2019). Fi m SIZE emains signi ican ,
wi h a coe icien o 0.281 and a p- alue o 0.009, indica ing
ha la ge i ms ha e highe di ec emissions. Howe e , he
e ec size is smalle han i s impac on To al GHG emissions.
This e lec s la ge companies’ inhe en challenges in cu b-
ing emissions di ec ly ied o hei co e ope a ional ac i i ies.
O he a iables, such as BOARDIV,CAPINT, and GROWTH, do
no signi ican ly impac Scope 1 emissions in High-Emission-
Sec o s, indica ing ha hese ac o s migh no di ec ly in lu-
ence ope a ional-le el emissions.
O e all, he eg ession esul s sugges ha Scope 1 emis-
sions a e less sensi i e o he independen a iables han To-
al GHG emissions in H1. The lack o a signi ican nega i e
ela ionship be ween ROA and Scope 1 emissions in High-
Emission-Sec o s indica es ha p o i abili y may no be linked
o p ac ices educing di ec emissions. Ins ead, he esul s
may sugges ha inc eased p o i is no d i ing mo e sus-
ainable ac i i ies bu a he associa ed wi h mo e business
ac i i ies ha emi mo e GHG, in line wi h he esea ch o L.
Wang e al. (2014), which men ioned he s ong mining in-
dus y in hei sample as a po en ial eason o his ela ion-
ship. These indings sugges ha we canno ejec H0 o Hy-
po hesis H2 in bo h Low- and High-Emission-Sec o s, as ROA
is no signi ican ly nega i ely associa ed wi h Scope 1 GHG
emissions. These esul s highligh he mixed indings iden-
i ied in he SLR and he impo ance o analysing he h ee
Scopes indi idually, as di e ences in hei ela ionships wi h
inancial pe o mance we e expec ed.
Resul s o Hypo hesis H3
Scope 2 emissions a e indi ec emissions om pu chased
ene gy, and Table 7p esen s he esul s o Hypo hesis H3,
which examines he link be ween p o i abili y and hese in-
di ec emissions. I a ailable, he LSEG Eikon Da abase uses
loca ion-based Scope 2 emissions, allowing us o ocus on
hei implica ions.
The eg ession analysis o Low-Emission-Sec o s e eals
ha he model has limi ed explana o y powe , as indica ed by
an o e all R2o 0.121. Despi e his, ROA is he only s a is i-
cally signi ican a iable a he 5% le el, wi h a coe icien o
0.518 and a p- alue o 0.016. This posi i e ela ionship sug-
ges s ha mo e p o i able i ms in Low-Emission-Sec o s ha e
highe Scope 2 emissions. This inding con adic s he Slack
Resou ce Theo y, which posi s ha mo e p o i able i ms ha e
addi ional esou ces o in es in ene gy e iciency and emis-
sion educ ions, bu could also indica e ha loca ion-based
Scope 2 emissions a e no easily educed wi h highe inancial
esou ces due o he challenges o in luencing he local g id
ene gy-mix (Ka lsson e al., 2009). O he a iables such as
i m SIZE, BOARDDIV, CAPINT, and GROWTH do no signi i-

Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333 323
Table 7: Reg ession Resul s o Hypo hesis H3
Dependen Va iable
Scope 2 Low-Emission-Sec o s High-Emission-Sec o s
Independen Va iables Coe icien P-Value Coe icien P-Value
In e cep 5.895* 0.056 24.135** 0.027
ROA 0.518** 0.016 2.173 0.114
SIZE 0.186 0.172 -0.560 0.246
BOARDDIV -0.793 0.123 -0.068 0.844
CAPINT 0.219 0.432 0.242 0.498
GROWTH -0.129 0.143 -0.040 0.903
No. Obse a ions: 1,245 1,279
No. En i ies: 267 271
F-s a is ic ( obus ): 4.185 1.093
P-Value: 0.001 0.362
R2(Be ween): 0.121 -0.530
can ly impac Scope 2 emissions, sugges ing ha hese ac o s
may no di ec ly in luence ene gy consump ion and associ-
a ed emissions in Low-Emission-Sec o s.
The eg ession model’s explana o y powe o High-
Emission-Sec o s is no ably poo , wi h a p- alue o 0.362,
indica ing a weak link be ween he dependen and he in-
dependen a iables. None o he independen a iables a e
s a is ically signi ican a he 5% le el, and he model ails
o e ec i ely explain he a iabili y in Scope 2 emissions.
Howe e , ROA displays a posi i e coe icien o 2.173, which
is ma ginally non-signi ican a he 10% le el (p- alue o
0.114). This sugges s a po en ial end whe e inc eased p o -
i abili y is associa ed wi h highe Scope 2 emissions, al hough
he ela ionship lacks s a is ical signi icance. The absence o
signi ican explana o y a iables may imply ha ac o s be-
yond he scope o he cu en model, such as ene gy-sou cing
s a egies o he local ene gy mix (Chuang e al., 2018; WRI
& WBCSD, 2004), could play a mo e subs an ial ole in
in luencing Scope 2 emissions in High-Emission-Sec o s. In-
e es ingly, i m SIZE does no signi ican ly impac Scope
2emissions in ei he sec o , indica ing ha company SIZE
alone may no de e mine ene gy consump ion o indi ec
emission le els.
O e all, he esul s indica e ha he examined a iables
less in luence Scope 2 emissions compa ed o To al GHG o
Scope 1 emissions, which was expec ed om he elabo a-
ion o Hypo hesis H3. The posi i e ela ionship be ween
p o i abili y and Scope 2 emissions in Low-Emission-Sec o s
sugges s ha mo e p o i able companies ely mo e on pu -
chased ene gy c ea ing GHG emissions. Meanwhile, he lack
o signi ican p edic o s in High-Emission-Sec o s highligh s
he complexi y o managing ene gy- ela ed emissions and
he di e ences be ween he Scopes and indus ies. Conse-
quen ly, we ail o ejec H0 o Hypo hesis H3 in Low- and
High-Emission-Sec o s. In Low-Emission-Sec o s, he posi i e
impac o ROA con adic s he expec a ion. In High-Emission-
Sec o s, he model lacks signi ican explana o y a iables, in-
dica ing a need o u he esea ch o unco e addi ional ac-
o s in luencing Scope 2 emissions.
Resul s o Hypo hesis H4
The las hypo hesis o his hesis e alua es he impac o
p o i abili y on Scope 3 GHG emissions, and he eg ession
esul s a e shown in Table 8.
In Low-Emission-Sec o s, he eg ession model is s a is i-
cally signi ican o e all, as indica ed by an F-s a is ic p- alue
o 0.000, wi h an R2o 0.298. The ROA has a nega i e coe i-
cien o -1.279 wi h a p- alue o 0.034, he la ges coe icien
o ROA in he Low-Emission-Sec o s, signi ying ha highe
p o i abili y is associa ed wi h lowe Scope 3 emissions. This
nega i e ela ionship sugges s ha p o i able i ms migh be
in es ing in mo e sus ainable supply chain p ac ices, such
as selec ing en i onmen ally conscious supplie s (Fagundes
Al es e al., 2024), eco- iendly and du able p oduc design
(Asi e al., 2022; Boo h e al., 2023) o op imising logis-
ics and sou cing (He wich & Wood, 2018), educing Value
Chain emissions. Fi m SIZE also signi ican ly impac s Scope 3
emissions, wi h a coe icien o 0.962 and a p- alue o 0.002,
indica ing ha la ge i ms end o ha e highe Scope 3 emis-
sions. This could be due o la ge i ms ha ing mo e ex en-
si e supply chains and g ea e p oduc dis ibu ion equi e-
men s (Bode & Wagne , 2015). In e es ingly, BOARDDIV has
a signi ican posi i e impac on emissions, wi h a coe icien
o 2.948 and a p- alue o 0.000, sugges ing ha mo e di e se
boa ds migh ace challenges in aligning sus ainabili y objec-
i es ac oss complex alue chains (R. B. Adams e al., 2015)
o i migh e lec di e se pe spec i es ha inc ease epo -
ing anspa ency wi hou immedia e educ ion e o s (Liao
e al., 2015; Tingbani e al., 2020).
The model also achie es s a is ical signi icance o High-
Emission-Sec o s, wi h an R2o 0.370. The e ec o p o -
i abili y on Scope 3 emissions is mo e p onounced he e,
wi h an ROA coe icien o −6.234 and a p- alue o 0.002.
This s onge nega i e impac indica es ha i ms in High-
Emission-Sec o s migh le e age p o i abili y mo e e ec i ely
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333324
Table 8: Reg ession Resul s o Hypo hesis H4
Dependen a iable
Scope 3 Low-Emission-Sec o s High-Emission-Sec o s
Independen Va iables Coe icien P-Value Coe icien P-Value
In e cep -10.141 0.137 -33.194*** 0.000
ROA -1.279 ** 0.034 -6.234 *** 0.002
SIZE 0.962 *** 0.002 2.106 *** 0.000
BOARDDIV 2.948 *** 0.000 0.463 0.592
CAPINT -0.974 0.634 1.962 ** 0.030
GROWTH -0.095 0.568 -0.207 0.272
No. Obse a ions: 1,245 1,279
No. En i ies: 267 271
F-s a is ic ( obus ): 6.232 9.339
P-Value: 0.000 0.000
R2(Be ween): 0.298 0.370
o engage in emissions- educ ion ac i i ies ac oss hei alue
chains, as men ioned abo e. Fi m SIZE, wi h a coe icien o
2.106 and a p- alue o 0.000, is posi i ely co ela ed wi h
Scope 3 emissions, u he highligh ing he complexi y o he
alue chain and emissions in High-Emission-Sec o s.CAPINT
also exhibi s a signi ican posi i e ela ionship wi h Scope 3
emissions, wi h a coe icien o 1.962 and a p- alue o 0.030,
implying ha capi al-in ensi e i ms a e mo e likely o ha e
highe o he indi ec emissions, possibly due o g ea e con-
sump ion o esou ces and ene gy h oughou hei supply
chains, a inding suppo ed by (He wich & Wood, 2018).
The indings suppo he ejec ion o H0 o Hypo he-
sis H4, as p o i abili y is nega i ely associa ed wi h Scope 3
GHG emissions o i ms in bo h Low- and High-Emission-
Sec o s. The esul s sugges ha inancially success ul compa-
nies could be po en ially be e posi ioned o implemen sus-
ainabili y ini ia i es ha educe emissions ac oss hei en i e
alue chain. The la ge nega i e co ela ion be ween ROA and
Scope 3 emissions unde sco es he impo ance o in eg a -
ing en i onmen al sus ainabili y in o he b oade s a egic
objec i es o p o i able i ms. O e all, he eg ession anal-
ysis unde sco es he impo ance o add essing Scope 3 emis-
sions as pa o a comp ehensi e clima e s a egy, gi en hei
signi ican con ibu ion o a i m’s o e all ca bon oo p in
(Ma hews e al., 2008). The esul s also highligh he di -
e en ela ionships be ween each Scope by showing a sig-
ni ican nega i e ela ion wi h ROA o bo h Low- and High-
Emission-Sec o s, con as ing wi h he indings o Scope 1
and Scope 2. By ocusing on alue chain emissions, com-
panies can achie e meaning ul educ ions in hei en i on-
men al impac , align wi h global sus ainabili y goals, and en-
hance hei epu a ion and compe i i e ad an age in inc eas-
ingly en i onmen ally-conscious ma ke s.
7.2.3. Robus ness Tes s
To ensu e he eliabili y o he esul s, a se ies o obus -
ness es s we e conduc ed o examine he impac o p o i abil-
i y on GHG emissions. These checks ocused on he di ec ion
and signi icance o he ela ionship be ween p o i abili y and
GHG emissions ac oss a ious dimensions. The esul s o all
obus ness checks can be ound in Appendix 4 and a e only
b ie ly discussed.
Di e en measu es o p o i abili y, such as ROE and ROS,
we e employed o es he di e ences and is a common way
o obus ness checks in his ield (Busch e al., 2022; Hassan
& Romilly, 2018). The analysis e ealed ha while he ela-
ionship di ec ion emained consis en , he signi icance was
less p onounced o ROE and non-exis en o ROS. Simila
di ec ional esul s we e obse ed using a GHG me ic el-
a i e o i m e enues. Howe e , he ela ionship be ween
ROA and all GHG Scopes lacked s a is ical signi icance. Fu -
he mo e, inco po a ing he na u al loga i hm o o al asse s,
ins ead o e enues, as a SIZE con ol a iable did no al-
e he di ec ion o he ela ionship be ween ROA and GHG
Scopes bu signi ican ly diminished model pe o mance and
he signi icance o he indings. These mixed esul s a e com-
mon in mos s udies analysing simila ela ionships (Busch
& Lewandowski, 2018; Lewandowski, 2017), and indica e
he high dependence o esul s on speci ic me ics, making i
challenging o d aw de ini i e conclusions.
Following a p ocedu e simila as Hassan and Romilly
(2018) o assess he in luence o ex eme ou lie s, he da a
was unca ed a he 1s and 99 h pe cen iles and he 5 h and
95 h pe cen iles. This esul s in ou comes compa able o he
p ima y analysis wi hou ou lie emo al, albei wi h sub le
di e ences in signi icance le els. Analysing he en i e sam-
ple wi hou dis inguishing be ween Low- and High-Emission-
Sec o s p oduced esul s ha aligned wi h bo h da ase ’s
expec a ions. The ela ionship wi h Scope 3 emissions was
nega i e and signi ican , while he ela ionship wi h Scope
2emissions was posi i e and signi ican . In con as , he
ela ionship wi h Scope 1 emissions was posi i e bu no sig-
ni ican , and he ela ionship wi h To al GHG emissions was
nega i e bu no signi ican . Las ly, conside ing he signi -
ican dis up ion o business ac i i ies and GHG emissions
du ing he COVID-19 pandemic in 2020, he exclusion o
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333 325
his yea om he analysis did no al e he main indings.
Howe e , i did esul in mino changes o he signi icance
le els.
O e all, he obus ness checks con i med he gene al e-
liabili y o he analysis bu indica ed signi ican di e ences
depending on he choice o a iables. This inding is also
consis en wi h cu en li e a u e and shows he complexi y
and di icul ies o unde s anding he ela ionship be ween i-
nancial pe o mance and GHG emissions.
7.2.4. Limi a ions
In his chap e , we discuss he limi a ions encoun e ed
du ing his esea ch, which includes model speci ica ion con-
s ain s, da a limi a ions and b oade con ex ual challenges.
Recognising hese limi a ions is essen ial o in e p e ing he
indings accu a ely and unde s anding he scope o he s udy.
A signi ican heo e ical limi a ion o his s udy is he
sca ci y o compa able esea ch on he di ec ional ela ion-
ship be ween p o i abili y and GHG emissions, as iden i ied in
he SLR, which se ed as he mo i a ion o his hesis. This
sca ci y makes i di icul o benchma k he indings and high-
ligh s he need o u he empi ical esea ch o alida e he
esul s o his hesis. Ano he challenge is he po en ial bidi-
ec ional ela ionship be ween p o i abili y and GHG emis-
sions, men ioned by se e al schola s (Busch & Ho mann,
2011; Tes a & D’Ama o, 2017; Waddock & G a es, 1997).
While his s udy ocuses on he impac o p o i abili y on GHG
emissions, emissions may also a ec p o i abili y, as shown
in he li e a u e iden i ied in he SLR. This in oduces endo-
genei y conce ns ha could bias he esul s.
The ixed-e ec s model used in his s udy assumes
ha indi idual-speci ic e ec s a e ime-in a ian and un-
co ela ed wi h explana o y a iables, which may no al-
ways be accu a e, po en ially leading o biased es ima es
(Woold idge, 2012, pp. 484–496). Fu he mo e, he model
does no allow o es ima e speci ic ime-in a ian a iables
like he company sec o s, which a e supposedly majo de-
e minan s o GHG emissions (Ghasemi e al., 2023). The
limi a ions o ixed-e ec models o o he OLS-based eg es-
sions a e men ioned in se e al s udies, which suppo he
use o o he models like quan ile eg essions o he Gaussian
Mix u e Model (Meng e al., 2023; Rod íguez-Ga cía e al.,
2022). Fu he mo e, he model assumes linea i y, which may
no cap u e he complex, non-linea ela ionships o ipping
poin s be ween p o i abili y and GHG emissions iden i ied
in he li e a u e (Misani & Pogu z, 2015; Ogun inde e al.,
2022). Since he eg ession models iden i y co ela ions
a he han causa ions, we canno make de ini i e causal
claims wi hou expe imen al o quasi-expe imen al designs.
Explo ing al e na i e me hods, such as dynamic models o
machine lea ning echniques, could be e cap u e complex
in e ac ions and non-linea i ies, o e ing iche insigh s in o
hese dynamics.
The s udy p esen s mixed esul s ac oss di e en Scopes
o GHG emissions and a ying explana o y a iables. These
inconsis encies unde sco e he complexi y o assessing he
impac o p o i abili y on GHG emissions and highligh he
need o u he in es iga ion in o po en ial mode a ing a i-
ables. A undamen al limi a ion o his s udy is he isk o
omi ed a iables, pa icula ly hose in luencing Scope 1,
2 and 3 emissions. Each Scope appea s o ha e dis inc
de e minan s, as sugges ed by he signi ican a iance in
model pe o mance ac oss hese Scopes. Addi ionally, clas-
si ying companies in o low- and high-emissions sec o s may
be o e ly simplis ic and ail o cap u e sec o al complex-
i y, po en ially leading o misin e p e a ions. Di e en ia ing
e ec s caused by speci ic business model cha ac e is ics is
challenging wi hou ex ensi e de ail. Fu u e esea ch should
use mo e g anula classi ica ions o ocus on indi idual high-
emi ing sec o s. As discussed in he p e ious chap e , o-
bus ness es s show signi ican di e ences when using a -
ious measu es and p o i abili y me ics, like ROE and ROS,
indica ing ha measu emen choice can subs an ially in-
luence indings. This equi es cau ious in e p e a ion and
mo e comp ehensi e obus ness checks in u u e s udies.
Measu emen e o s can also esul om inconsis encies in
epo ing s anda ds and es ima ion me hods o companies,
which is a highligh ed p oblem o Scope 3 emissions (Fou e
e al., 2024; Pa chell, 2018), po en ially a ec ing he s udy’s
indings.
The da ase used in his s udy is based on he STOXX Eu-
ope 600 index, which includes he la ges 600 Eu opean
companies. This ocus on Eu opean companies limi s he
indings’ gene alisabili y o o he egions wi h di e en eg-
ula o y en i onmen s, ma ke dynamics, and en i onmen-
al p ac ices. Fu he mo e, small and medium-sized en e -
p ises (SMEs) a e no included in he sample, limi ing he
esul s’ applicabili y o la ge co po a ions. SMEs may ex-
hibi di e en dynamics in p o i abili y and GHG emissions,
so u u e esea ch should include a b oade ange o compa-
nies. Al hough da a a ailabili y has imp o ed, he da ase is
s ill unbalanced, wi h missing in o ma ion ha could in o-
duce bias and a ec eliabili y. As discussed in Chap e 2.2.3,
he upcoming CSRD con o ming epo s a e expec ed o im-
p o e da a anspa ency, quali y, and a ailabili y o bo h
la ge and smalle i ms, especially ega ding GHG emissions
disclosu es ac oss all h ee Scopes.
In summa y, his s udy’s limi a ions p o ide c i ical in-
sigh s in o he cons ain s and challenges aced du ing he
esea ch p ocess. Acknowledging hese limi a ions helps con-
ex ualise he indings and unde sco es he need o con in-
ued esea ch. Fu u e s udies should add ess hese limi a ions
by inco po a ing mo e comp ehensi e da ase s, explo ing al-
e na i e model speci ica ions, and cau iously examining he
complex in e ac ions be ween p o i abili y and GHG emis-
sions.
7.2.5. Key Findings and Summa y o Resul s
This chap e aims o syn hesise he esul s o he ou
p e ious hypo heses in o key indings and a summa y. The
empi ical analysis dis inguishes be ween Low- and High-
Emission-Sec o s, unco e ing a signi ican a iance in he
impac o p o i abili y on GHG emissions depending on he
scope and sec o ype. Table 9shows he ela ionship di-
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333326
Table 9: Key Findings o Reg essions H1-H4
Co ela ion wi h ROA
Emission Types Low-Emission-Sec o s High-Emission-Sec o s
H1: To al GHG Nega i e, no signi ican Nega i e, signi ican
H2: Scope 1 Posi i e, no signi ican Posi i e, no signi ican
H3: Scope 2 Posi i e, signi ican Posi i e, no signi ican
H4: Scope 3 Nega i e, signi ican Nega i e, signi ican
ec ion om each eg ession and he signi icance le el a
5%.
P o i abili y shows a signi ican nega i e co ela ion be-
ween To al GHG and Scope 3 emissions in High-Emission-
Sec o s and Scope 3 emissions in Low-Emission-Sec o s. This
aligns wi h he heo e ical amewo k, indica ing ha mo e
p o i able companies may in es mo e in educing GHG emis-
sions o enhance legi imacy o s akeholde sa is ac ion. How-
e e , his could also indica e ha mo e p o i able companies
inhe en ly ha e mo e sus ainable business models, which
highligh s he limi a ions o hese eg essions. In o de o
isola e he e ec o p o i abili y mo e om o he ac o s, i
would he e o e be ad isable o compa e he pe o mance
o companies ha di e as li le as possible apa om p o -
i abili y. This means p e e ably om he same indus y, wi h
he same business model, and he same geog aphical ocus.
Con e sely, p o i abili y is posi i ely linked o Scope 1 and
Scope 2 emissions, bu only signi ican o Scope 2 in Low-
Emission-Sec o s, sugges ing ha hese models do no ully
cap u e he de e minan s o emissions o hese Scopes. Ad-
di ionally, he models o Scope 2 emissions a e he leas sig-
ni ican , implying ha ac o s no included in he eg essions,
like local g id ene gy mix, may play a c ucial ole. The low
explana o y powe o he models o Scope 2 emissions un-
de sco es he impo ance o ex e nal ac o s like local en-
e gy g ids, sugges ing ha u u e esea ch should inco po-
a e explana o y a iables speci ic o each Scope o achie e
mo e conclusi e esul s. Con ol a iables p esen nuanced
esul s: i m SIZE posi i ely co ela es wi h To al GHG,Scope
1, and Scope 3 emissions ac oss bo h Low- and High-Emission-
Sec o s, while BOARDDIV and CAPINT show signi icance only
in speci ic con ex s. Unexpec edly, BOARDDIV posi i ely co -
ela es wi h Scope 3 emissions in Low-Emission-Sec o s, which
may e lec challenges in aligning di e se pe spec i es wi h
sus ainabili y goals, o inc eased anspa ency. Capi al in-
ensi y is only signi ican ly ela ed o To al GHG and Scope 3
emissions in High-Emission-Sec o s, consis en wi h i s asso-
cia ion wi h GHG-in ensi e ac i i ies.
O e all, he indings show mixed esul s, signi ican ly di -
e ing be ween Low- and High-Emission-Sec o s as well as
ac oss he speci ic Scopes o emissions. The esul s don’ al-
low a de ini i e conclusion on he impac o p o i abili y on
To al, Scope 1, 2 and 3 GHG emissions and indica e he need
o u he , sec o and Scope speci ic esea ch. The nex and
las chap e o his hesis is dedica ed o he implica ions o
his wo k and he inal conclusion.
8. Implica ions and Conclusion
Clima e change is inc easingly causing se e e challenges
wo ldwide. One o he c i ical objec i es in comba ing cli-
ma e change, as ou lined in he Pa is Ag eemen , is he educ-
ion o GHG emissions. Enhancing companies’ sus ainabil-
i y epo ing equi emen s is c i ical o achie ing his goal.
As sus ainabili y epo ing e ol es apidly, new egula ions
such as he Co po a e Sus ainabili y Repo ing Di ec i e a e
making he disclosu e o sus ainabili y- ela ed in o ma ion
manda o y, including Scope 1, 2 and 3 GHG emissions. This
aligns wi h he p inciple o “wha ge s measu ed ge s man-
aged” (D ucke , 2007), emphasising he impo ance o ans-
pa ency and accoun abili y in d i ing sus ainable p ac ices.
One ques ion ha schola s ha e asked hemsel es equen ly
is whe he “i pays o be g een”. Al hough indings indica e
ha i could pay o be g een, s udies also ind mixed esul s
and o en desc ibe he p oblem o po en ially e e se causal-
i y and bidi ec ionali y o his ela ion. In line wi h he Slack
Resou ce Theo y, a mo e p o i able company could be spend-
ing mo e money on CSR and emission educ ion ini ia i es.
Howe e , only sca ce li e a u e exis s on he ela ion whe he
“p o i abili y d i es sus ainabili y”. This hesis aimed o close
his esea ch gap iden i ied in he sys ema ic li e a u e e iew
and help schola s, businesses, and poli ics be e unde s and
he e ec o p o i abili y on GHG emissions o companies.
Two esea ch ques ions we e o mula ed o do he opic jus-
ice.
The i s esea ch ques ion, “Wha a e he Scope 1, 2 and
3 GHG emissions le els o Eu opean companies om 2017-
2023?”, aimed o p o ide an o e iew o GHG emissions in
Eu ope ac oss all Scopes, o he la ges 600 companies in
Eu ope, based on he STOXX Eu ope 600 index. The ind-
ings indica e a high le el o disclosu e o all h ee Scopes,
wi h s eady inc eases o e he yea s. Howe e , while sig-
ni ican ly imp o ed, Scope 3 emissions disclosu es ha e no
ye eached he le el o Scope 1 and 2 disclosu es. The e
emains conside able a iabili y in Scope 3 emissions le els
wi hin and be ween companies, e lec ing ongoing calcula-
ion, me hodology, and compa abili y challenges. The da a
e eals ha median g ow h ends o companies a e nega-
i e o Scope 1 and 2 emissions, while Scope 3 emissions
show a sligh g ow h. This pa e n is consis en ac oss sec-
o s, unde sco ing he impo ance o Scope 3 emissions in un-
de s anding he ull pic u e o GHG emissions. The COVID-
19 pandemic’s e ec is e iden , wi h a no able d op in emis-
sions du ing he majo pandemic yea and a subsequen e-
co e y in 2021. Addi ionally, he sec o analysis shows ha a
Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333 327
small numbe o companies om high-emi ing sec o s, such
as ene gy, ma e ials, and indus ials, a e esponsible o mos
GHG emissions, highligh ing he disp opo iona e impac o
high-emi ing indus ies and companies on global GHG emis-
sions.
The second esea ch ques ion, “How does i m p o i abil-
i y impac o al and indi idual Scope 1, 2 and 3 GHG emis-
sions?”, builds on he emissions o e iew insigh s and anal-
yses he p o i abili y co ela ion wi h all GHG Scopes using
ixed-e ec eg essions. The ela ionship be ween p o i abil-
i y and GHG emissions was examined by ca ego ising compa-
nies in o low-emission and high-emission sec o s o cap u e
he di e ences in emissions p o iles accu a ely. The analy-
sis e ealed a nega i e co ela ion be ween p o i abili y and
Scope 3 emissions, which was he s onges ac oss all eg es-
sions, highligh ing he signi ican impac o p o i abili y on
his Scope. Due o he la ge con ibu ion o Scope 3 emis-
sions, he eg ession o To al GHG emissions yielded sim-
ila bu less signi ican esul s. In e es ingly, he di ec ion
o he ela ionship be ween p o i abili y and Scope 1 and 2
emissions was unexpec edly posi i e o bo h high and low-
emi ing sec o s, hough hese indings lacked s a is ical sig-
ni icance in mos cases. O e all, he impac o p o i abili y
on all Scopes o GHG emissions was mo e p onounced in
high-emi ing sec o s han low-emi ing ones, unde sco ing
he s onge connec ion o p o i s and GHG emission in hese
sec o s. Conduc ed obus ness es s gene ally con i m he
eliabili y o he indings, al hough using ela i e measu es
o GHG emissions and al e na i e p o i abili y me ics e-
sul ed in nuanced esul s. While hese al e na i e app oaches
la gely poin ed in he same di ec ion, hey o en showed less
o no s a is ical signi icance. In conclusion o esea ch ques-
ion wo, he ela ionship a ies ac oss each Scope, highligh -
ing he need o u he esea ch.
The implica ions o he indings o schola s, businesses,
and policymake s a e mul i ace ed. Schola s mus conside
he po en ial bidi ec ional and e e se ela ionship be ween
inancial pe o mance and GHG emissions. Because i may
no only “pay o be g een” bu “p o i abili y may d i e sus-
ainabili y”, ecognising his is impo an and should be ac-
coun ed o in u u e esea ch. Addi ionally, he mixed e-
sul s be ween he speci ic Scopes indica e he need o accoun
o Scope-speci ic de e minan s and ocus on indi idual ela-
ionships a he han To al GHG emissions. Since business
p ac ices less in luence GHG emissions in low-emission sec-
o s, and a ew sec o s p oduce he mos emissions, schol-
a s should ocus on he sec o s whe e he mos GHG educ-
ion can be achie ed i s . Businesses mus p io i ise educing
Scope 3 emissions, as hey cons i u e he majo i y o GHGs,
and ensu e accu a e ca bon accoun ing o manage emissions
e ec i ely. To achie e ha , policymake s need o ensu e ha
all ma e ial emissions a e included, and ha he compa a-
bili y o Scope 3 emissions is imp o ed, especially because
Scope 1 and Scope 2 emissions can be shi ed o Scope 3
by business p ac ices like ou sou cing. Simila o he ocus
o schola s, GHG educ ion policies should ocus on educ-
ing emissions om high-emi ing companies and sec o s o
achie e he mos impac on he igh agains clima e change.
The indings indica e ha he emission o GHG is s ill pa o
many business models since p o i abili y is posi i ely, bu o
mos , no signi ican ly co ela ed wi h Scope 1 and 2 GHG
emissions. This sugges s ha poli ical measu es should be
ein o ced o hold companies accoun able o he en i on-
men al damages hey cause, while also implemen ing s ic e
egula ions o educe o elimina e g eenhouse gas emissions.
Al hough ca bon axes and emissions ading a e a good s a ,
policies mus go u he o ensu e companies ully in e nalize
he en i onmen al cos s o hei ac i i ies, he eby in ensi y-
ing he u gency o achie e lowe emissions.
Howe e , he indings and implica ions o his s udy
should be in e p e ed wi h cau ion, and he limi a ions
mus be acknowledged. A majo heo e ical cons ain is he
sca ci y o compa able esea ch on his opic, making i chal-
lenging o benchma k indings and emphasising he need o
u he empi ical alida ion. Addi ionally, he po en ial bidi-
ec ional na u e o he ela ionship in oduces endogenei y
conce ns, as emissions can also a ec p o i abili y, complica -
ing in e p e a ion. Fu he mo e, he ixed e ec s model used
in he analysis assumes he ime-in a iance o ixed e ec s
and linea i y o he ela ionship, which may no cap u e he
complex, po en ially non-linea ela ionship be ween p o -
i abili y and GHG emissions. Besides, da a limi a ions also
impac he s udy’s gene alisabili y. The ocus on he STOXX
Eu ope 600 index, comp ising he la ges Eu opean compa-
nies, excludes small and medium-sized en e p ises (SMEs)
and limi s applicabili y o o he egions wi h di e en egu-
la o y en i onmen s. Addi ionally, he da ase ’s unbalanced
na u e and missing in o ma ion pose challenges o he e-
liabili y o he indings. Acknowledging hese limi a ions
unde sco es he impo ance o u u e esea ch o alida e
and expand upon hese indings, inco po a ing mo e com-
p ehensi e da ase s and explo ing al e na i e models o un-
de s and he in ica e ela ionship be ween p o i abili y and
GHG emissions.
Based on he indings and he implica ions, a sugges ion
o u u e esea ch would be o ocus on single high-emission
sec o s o compa e how he p o i abili y o di e en i ms in
simila con ex s in luences Scope 1, 2 and 3 GHG emissions.
The esul s ha e shown subs an ial di e ences be ween each
Scope, and a clea dis inc ion o hese in u u e esea ch is
ad isable. Fu he mo e, he manda o y disclosu e o emis-
sions ac oss all h ee Scopes o i ms alling unde he CSRD
is a chance o pe o m simila esea ch wi h mo e and be e
da a in he coming yea s. Hope ully allowing o ex ensi e
analyses o e ime.
Ul ima ely, his wo k highligh s he complex ela ionship
be ween p o i abili y and GHG emissions, unde sco ing he
challenge o d awing de ini i e conclusions while emphasis-
ing socie y’s con inued eliance on en i onmen ally ha m ul
business p ac ices o economic gain. Only he e o s o busi-
nesses, policymake s, and socie y can mi iga e he ad e se
e ec s o clima e change and ensu e a esilien and sus ain-
able wo ld o u u e gene a ions. P ope ca bon accoun ing
and epo ing a e essen ial i s s eps, bu a e hey enough?

Y. Hohens ein /Junio Managemen Science 10(2) (2025) 292-333328
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