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Firms’ Environmental Performance and the COVID-19 Crisis
Author: Pierre Guérin and Felix Suntheim
Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 089
Language:
English
Publication Date:
19 Mar 2021
DOI:
https://doi.org/10.5089/9781513574493.001
ISBN:
9781513574493
ISSN:
1018-5941
Pages:
25
Keywords:
Corporate sustainability; climate change; transition risks.; Oil market-shock; appendix table; capital markets department; oil price shock; oil inventory demand shock; Oil prices; COVID-19; Sustainable growth; Greenhouse gas emissions; Global; oil market literature; oil demand shocks; Oil-market shock; oil-market shock
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The shutdown in economic activity due to the coronavirus disease (COVID-19) crisis has resulted in a short-term decline in global carbon emissions, but the long-term impact of the pandemic on the transition to a low-carbon economy is uncertain. Looking at previous episodes of financial and economic stress to draw implications for the current crisis, we find that tighter financial constraints and adverse economic conditions are generally detrimental to firms’ environmental performance, reducing green investments. The COVID-19 crisis could thus potentially slow down the transition to a low-carbon economy. In light of the urgent need to reduce global greenhouse gas emissions, these findings underline the importance of climate policies and green recovery packages to boost green investment and support the energy transition. Policies that support the sustainable finance sector, such as improved transparency and standardization, could further help mobilize green investments.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund