A New Approach to Evaluate Environmental Strategy under Balanced Scorecard Framework: Evidence from Selected Petroleum Companies

The main part of this thesis is to empirically investigate the environmental strategy under the terms of CO2 emission reductions from managers' and investors' perspectives. Data employed for seventeen international petroleum companies for the period 2005q1-2016q4. According to the information available in the sustainability reports of chosen companies, strategy map and the Balanced scorecard constructed to determine the relationship between key performance indicators (KPIs). Panel dynamic regression analysis employed to evaluate the strategy by testing the impact of eco-innovation on CO2 emission reductions and financial performance for both short and long periods. The results point out that the environmental strategy has a significant and positive impact on CO2 emission reductions in the short-term whereas there is a direct and indirect significant and positive impact on financial performance in the long term. The findings of this thesis also add a new contribution to the BSC as an evolution framework where perspectives of strategy can be testable for both short and long periods, which provide a guideline to managers for strategy evaluation purpose, optimize the allocation of resources, and enhance both environmental and financial performance with long-term objectives. Keywords: Environmental Strategy, The Balanced Scorecard (BSC), The Porter Hypothesis, CO2 Emissions, Petroleum Companies, Dynamic Regression Analysis