When is environmental performance most valued?: international evidence from the CDS market

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dc.contributor.authorBallester Miquel, Laura
dc.contributor.authorGonzález Urteaga, Ana
dc.contributor.authorMartínez García, Beatriz
dc.contributor.departmentGestión de Empresases_ES
dc.contributor.departmentEnpresen Kudeaketaeu
dc.contributor.departmentInstitute for Advanced Research in Business and Economics - INARBEen
dc.contributor.funderUniversidad Pública de Navarra / Nafarroako Unibertsitate Publikoa
dc.date.accessioned2025-03-31T07:27:54Z
dc.date.available2025-03-31T07:27:54Z
dc.date.issued2025-03-17
dc.date.updated2025-03-31T07:21:56Z
dc.description.abstractUsing a sample of 516 firms with CDS data from 37 countries for the period 2010-2022, this study finds that companies with higher environmental performance, particularly in emissions reduction and product innovation, exhibit a reduction in credit risk, supporting the risk mitigation perspective. Our results also highlight the importance of considering both internal and external factors when assessing the financial impact of sustainability initiatives. Firms with initially lower environmental performance, less exposure to the environmental sector, and higher credit ratings experience a more significant reduction in credit risk as they improve their environmental performance. In addition, the CDS market places a higher value on environmental efforts for firms located in countries with lower environmental scores, credit ratings and GDP growth. Conversely, out findings support the overinvestment view for firms in sectors with high environmental risk exposure or in countries with poor climate change performance. Overall, the effect of a firm's environmental performance on credit risk is heterogeneous rather than uniform.en
dc.description.sponsorshipThe authors acknowledge financial support from Fundación Ramón Areces and Grant TED2021-131216B-I00 funded by MCIN/AEI/10.13039/501100011033 and by 'European Union NextGenerationEU/PRTR'. Ana Gonzalez-Urteaga and Beatríz Martínez acknowledge financial support from the Public University of Navarre (PJUPNA2023-11379). In addition, Laura Ballester acknowledges financial support PID2023-153128NB-I00 received from MCIU/AEI/10.13039/501100011033/FEDER,UE.
dc.format.mimetypeapplication/pdfen
dc.identifier.citationBallester, L., González-Urteaga, A., Martínez, B. (2025). When is environmental performance most valued?: international evidence from the CDS market. International Review of Economics and Finance, 99, 1-25. https://doi.org/10.1016/j.iref.2025.104057.
dc.identifier.doi10.1016/j.iref.2025.104057
dc.identifier.issn1059-0560
dc.identifier.urihttps://academica-e.unavarra.es/handle/2454/53857
dc.language.isoeng
dc.publisherElsevier
dc.relation.ispartofInternational Review of Economics and Finance (2025), vol. 99, 104057
dc.relation.projectIDinfo:eu-repo/grantAgreement/AEI/Plan Estatal de Investigación Científica y Técnica y de Innovación 2021-2023/TED2021-131216B-I00/
dc.relation.projectIDinfo:eu-repo/grantAgreement/AEI/Plan Estatal de Investigación Científica y Técnica y de Innovación 2021-2023/PID2023-153128NB-I00/ES/
dc.relation.publisherversionhttps://doi.org/10.1016/j.iref.2025.104057
dc.rights© 2025 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY license.
dc.rights.accessRightsinfo:eu-repo/semantics/openAccess
dc.rights.urihttps://creativecommons.org/licenses/by/4.0/
dc.subjectEnvironmental performanceen
dc.subjectCDS spreadsen
dc.subjectCredit risken
dc.titleWhen is environmental performance most valued?: international evidence from the CDS marketen
dc.typeinfo:eu-repo/semantics/article
dc.type.versioninfo:eu-repo/semantics/publishedVersion
dspace.entity.typePublication
relation.isAuthorOfPublication095d724d-61c5-408c-b091-6ea37e9beb6b
relation.isAuthorOfPublication43973159-832c-400d-81a1-80db5653b6b1
relation.isAuthorOfPublication.latestForDiscovery43973159-832c-400d-81a1-80db5653b6b1

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