The investment-return-environment triangle in Cleaner Production projects

Elsevier BV
Publication Type:
Journal Article
Sustainable Production and Consumption, 2019, 19 pp. 161 - 168
Issue Date:
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This paper empirically examines the relationship between environmental investment, financial and environmental return. We tested this relationship with an analysis of 80 Cleaner Production projects, using an ordinary least squares (OLS) regression. Our results indicate that there is non-linear relationship between these variables. We find that the effect of the environmental investment on financial and environmental return takes an inverted U-shaped curve; this suggests that there is an optimal point of environmental investment and that the environmental investment is a stronger factor than environmental return in explaining the financial return. Regarding the bi-directional relationship between financial return and environmental return, our results follow a bi-directional quadratic relationship (inverted-U curve), where the environmental return is strongly affected by financial return but has a limited effect on financial return.
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