Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)

Abstract

The Green Products Strategy and Financial Performance: A Case of Firms Listed on the Johannesburg Stock Exchange

Author(s): Obey Dzomonda

This study assessed the link between the green products strategy and financial performance of firms listed on the Johannesburg Stock Exchange. The current study adopted a quantitative research method informed by a positivism research philosophy. The population of the study was all firms listed on the Johannesburg Stock Exchange. The sample consisted of 16 firms listed on the FTSE/JSE Responsible Investment Top 30 Index operating operate in Environmentally Sensitive Industries such as mining, energy, manufacturing as well as health and pharmaceuticals. Panel data spanning from 2011-2018 was used. Data was analysed using panel regression. Particularly, the feasible generalised least squares was used. Interestingly, the relationship between the green strategy and financial performance (EPS) was found to be significant at 10% significance level. To that effect, the alternative hypothesis stating that there is a significant positive relationship between the green strategy and the EPS of firms listed on the JSE was supported. This confirms that stakeholders such as customers, suppliers and investors are now preferring firms which excel in green initiatives. The novelty of this study is that it generated new empirical findings which can add value to the body of knowledge Recommendations are made for managers of listed firms to build a strong case for sustainability where the green strategy is incorporated into the main strategy of the business to align the business for financial benefits associated with the green revolution.

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