A note: Estimating the relationship between environmental performance and economic performance of South African mining companies
Prinsloo, Thomas Frederik
MetadataShow full item record
The purpose of the study is to determine the relationship between environmental performance and economic performance in the South African mining industry, where the economic performance consists of market-based and accounting-based estimates. In this regard, Spearman's ranking-order correlation was applied. The study found that there is some contradiction in the direction of the relationship between accounting-based estimates and market-based estimates and their relationship with environmental performance. Furthermore, there is some contradiction in the direction of the relationship between economic performance and the environmental performance of the different mining sectors. The main limitation is that only a limited number of mining companies reported on environmental-related issues. Only ten mining companies provided sufficient annual data over a five-year period. The contribution of this study is that it pointed out that causation can be argued both ways between environmental performance and economic performance. When a change in the environmental performance influences the economic performance, it can be determined whether it does/does not pay to be green. This one-sided view, used in previous studies, presents probably only half of the bigger picture.