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Appears in Collections:Accounting and Finance Journal Articles
Peer Review Status: Refereed
Title: Macro Uncertainty Impacts on ESG Performance and Carbon Emission Reduction Targets
Author(s): Alandejani, Maha
Al-Shaer, Habiba
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Issue Date: 27-Feb-2023
Date Deposited: 22-Feb-2024
Citation: Alandejani M & Al-Shaer H (2023) Macro Uncertainty Impacts on ESG Performance and Carbon Emission Reduction Targets. <i>Sustainability</i>, 15 (5), Art. No.: 4249.
Abstract: This study examines the impact of three macro uncertainty factors: economic policy uncertainty (EPU), political instability (PIS), and cultural uncertainty avoidance (UA), on corporate environmental, social and governance (ESG) performance and carbon emission reduction targets. Additionally, we examine whether these macro factors are affected by the profitability of the company. Using an unbalanced sample of companies located in the USA, China, and the UK during the period 2013–2020, results show that during times of economic uncertainty, companies are more likely to engage in ESG activities, including establishing emission reduction targets. Companies in countries with lower levels of political stability (PS) exhibit greater levels of social and environmental engagements, and companies operating in societies that tolerate risks, including the risk associated with climate change, are more likely to have better ESG performance and be committed to emission reduction targets. The results also suggest that profitable companies are more likely to deal with uncertain environments successfully, as they have the required resources to invest in ESG. The study suggests several practical implications for managers and policymakers.
DOI Link: 10.3390/su15054249
Rights: © 2023 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (
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