Balancing environment and economy: the interplay between eco-innovation, carbon emission and firm performance

Sammanfattning: With an ever-increasing human ecological footprint, the United Nations Sustainable Development Goals require global collaboration in terms of sustainable business practices to combat global ecological issues. Our study examines the complex relationship between eco-innovation, CO2 emissions, and financial performance using fixed effects panel data regression. While R&D is positively correlated with financial performance, we also found a negative relationship between R&D and CO2 emissions, particularly after the implementation of the United Nations Sustainable Development Goals. Surprisingly, environmental innovation shows a slight positive correlation with CO2 emissions, differing from previous studies. However, it has a positive impact on financial performance. Our findings highlight the need for further research to understand the complex impact of sustainable practices on CO2 emissions across industries. We underscore the importance of sustainable practices and environmental responsibility for a sustainable future. Overall, our study finds evidence to support the theory that eco-innovation may benefit firms’ financial performance and not just the environment.