Environmental Management Practices and Firm Performance in a South African Mining Firm

Abstract

This paper examines the impact of environmental management practices on the financial performance of a South African mining firm. The major aim of this paper is to investigate whether such practices have a close relationship with the mining firm’s financial performance (represented by return on equity [ROE]). The approach is a case study of a South African mining firm listed under the socially responsible index (SRI) of the Johannesburg Stock Exchange (JSE). It uses Green-Steel sa (pseudonym used in place of the real name) as a case study. Using multiple regression statistics, the return on equity of Green-Steel sa is regressed on three environmental management practices of Green- Steel (carbon reduction, energy efficiency, and water usage). The result shows there is no significant relationship between the variables and this lends credence to information gathered from Green-Steel environmental reports that Green-Steel’s environmental management practices are driven mostly by a desire to abide by regulations and also by a moral obligation to use environmental management practices to mitigate climate change impact.