The impact of ESG practices on Carbon emissions: Insights and evidence from the CAC40 ESG

Abstract

This research examines the effects of sustainable investment practices on environmental regulation by assessing the impact of ESG criteria on carbon dioxide (CO2) emissions.  A rigorous literature review and modeling are carried on in order to determine the relationship between ESG criteria and CO2 emissions. We use empirical data from the Refinitiv database concerning CAC40 ESG companies over the period 2010-2020 to determine the relationship between ESG criteria and CO2 emissions across different economic sectors. The methodology includes statistical analyses such as maximum likelihood, principal component analysis and factorial analysis method to measure the impact of sustainability practices on environmental degradation. By integrating these various disciplinary aspects, our research offers valuable insights into how financial decisions can contribute to reducing environmental degradation and promoting a sustainable economy.