Chart of the WeekFirms’ Environmental Performance in Times of Crisis

2020-10-27T16:58:35-04:00October 26, 2020|

By Pierre Guérin, Fabio Natalucci, Felix Suntheim

عربي, 中文, Español, Français, 日本語, Português, Русский 

Leaders are often called upon to “rise to the challenge” in times of crisis. As firms and their leaders rise as best they can amid the ongoing health and economic crises, yet another crisis lies on the horizon. A looming environmental crisis, obscured by the exigency of the pandemic, requires action be taken by firms (and others). So how will business leaders and companies respond?

Our latest analysis looks at past episodes of financial and economic stress to gauge the likely impact of the current crisis on firms’ environmental performance.

On the one hand, the COVID-19 pandemic could increase awareness of environmental risks and bring about a shift in consumer preferences, corporate actions, and investor behavior that could accelerate the transition to a low-carbon economy. On the other hand, there is a risk that financially weakened firms, amidst heightened economic uncertainty, will reduce their investments in long-horizon, capital-intensive green projects, slowing down the transition.

Past as predictor

Looking at a large international sample of listed firms over the period 2002 to 2019, our analysis shows that the environmental performance of financially constrained firms is […]

Chart of the Week: Why Energy Prices Matter

2019-03-25T15:01:36-04:00June 5, 2017|

By IMFBlog

June 5, 2017

Versions in   عربي (Arabic),  中文 (Chinese), Español (Spanish)

(photo: Imagine China/Newscom)

Wind turbines and solar panels generate electricity at power station, Jiangsu, China. Getting energy prices right will help reduce environmental costs and save lives (photo: Imagine China/Newscom)

World Environment Day is an occasion to consider why it’s so important to get energy prices right. The IMF has long argued that energy prices that reflect environmental costs can help governments achieve their goals not only for improving public health but also for inclusive growth and sound public finances.  

A number of countries such as Egypt, Indonesia, Mexico, and Saudi Arabia have recently taken important steps to increase energy prices towards market levels. Some others, such as India and China have made important strides in cost-effective renewable energy sources—and reduced their reliance on fossil fuels. Still, undercharging for fossil fuel energy remains pervasive and substantial and can cause severe health effects from pollution, particularly in densely populated countries. […]

Go to Top