Analysis of corporate CO₂ and energy cost efficiency: The role of performance indicators and effective environmental reporting

Corporate eco-efficiency should be managed to take environmental responsibility for climate change mitigation. However, firms have difficulty determining what eco-efficiency metric is appropriate, what key performance indicators are to be managed, and what characteristics of environmental reporting are effective for environmental management. Thus, this study develops and measures a corporate CO₂ and energy cost efficiency; and analyzes the key performance indicators and industrial characteristics for this cost efficiency and the key characteristics of environmental reporting to effectively enhance the cost efficiency. The cost efficiencies of 119 firms are measured by using a data envelopment analysis (DEA). A statistical Tobit regression analysis is used to analyze the key performance indicators and the characteristics of effective environmental reportings. The cost efficiencies of the firms are overall low and affected by industrial characteristics, i.e., assembly- or process-based manufacturing. The key performance indicators are significantly related with administration cost and energy intensities. The effective environmental reportings have a common characteristic that requires qualitative real evidences for environmental improvement, as well as quantitative environmental performances. This study provides valuable information for corporate environmental management and policy to effectively enhance the eco-efficiency of firms.