Publication Type

Transcript

Version

publishedVersion

Publication Date

7-2024

Abstract

The European Union's Green Taxonomy has been used by corporations to account for and disclose hundreds of billions of Euros in capital expenditures. The aim of the taxonomy is to set a common and clear definition about which economic activities are most needed for the transition to a low-carbon economy, in line with the objectives of the European Green Deal. It is essential that academic research explores (a) to what extent the taxonomy is clearly understood, (b) if it impacts financial, environmental and societal outcomes, and (c) how it can be advanced. We review the nascent literature on this new phenomenon, emphasize data challenges such as financial conflicts of interest, and explore new analytics for studying the green taxonomy. Specifically, we (i) classify green capex, green opex, green revenue and green asset ratio according to time horizon and direction of financial transaction, (ii) propose green operating profit before interest, tax, depreciation and amortization as difference between green revenue and green opex and (iii) the ratio of green capex to green revenue as measure of a corporation's speed of climate transition.

Keywords

Capital expenditures, climate transition, green deal, green taxonomies, EU technical expert group on sustainable finance

Discipline

Accounting | Finance and Financial Management

Research Areas

Integrative Research Areas

Publication

Accounting Forum

Volume

48

Issue

3

First Page

365

Last Page

373

ISSN

0155-9982

Identifier

10.1080/01559982.2024.2369343

Publisher

Taylor and Francis Group

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1080/01559982.2024.2369343

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