Is Green Profitable? A Look at Carbon Efficiency and Returns in Brazil’s Stock Market (B3)

This study explores the correlation between carbon emissions and financial performance in 73 companies in the Brazilian stock market(B3) and B3's Efficient Carbon Index (ICO2) in 2021. Linear regression models were used to analyze the impact of carbon emissions (EMC) on Profit per share (LPA), return on assets (ROA), and return on equity (ROE) while taking into account debt (END). We employed descriptive statistical methods to carry out this study and used ordinary least squares (OLS) and generalized least squares (GLS) estimation models. The econometric analysis software Gretl was used for linear regression analysis. The study found that, on average, companies with higher CO2 emissions had better financial performance in terms of EPS and ROE. However, the relationship between carbon emissions and financial performance is complicated, and the results should be interpreted cautiously, considering the study's limitations. This study aims to explore the correlation between carbon emissions and financial performance in 73 companies listed in B3's Efficient Carbon Index (ICO2) in 2021. Linear regression models were used to analyze the impact of carbon emissions (EMC) on Profit per share (LPA), return on assets (ROA), and return on equity (ROE) while taking into account debt (END). We employed descriptive statistical methods to carry out this study and used ordinary least squares (OLS) and generalized least squares (GLS) estimation models. The econometric analysis software Gretl was used for linear regression analysis. The study found that, on average, companies with higher CO2 emissions had better financial performance in terms of EPS and ROE. However, the relationship between carbon emissions and financial performance is complicated, and the results should be interpreted cautiously, considering the study's limitations.