Fulfilling expectations or overachieving: The role of market values in the linkage between environmental and financial performance

This article adds the influence of institutional settings in the relationship between companies' environmental and financial performance by arguing that firms can leverage their financial performance by conforming to individual values prevalent in (inter)national markets. The values and environmental beliefs of individuals, as available in European Social Survey 2016, were studied together with the environmental and financial performance data of European companies from the Eikon database (n = 920). Countries were grouped based on acquired individual-level behavioural profiles through multilevel latent profile analysis. Moderation analysis was then utilised to determine the effect of country group on the relationship between the companies' environmental and financial performance. Results indicated that the relationship is negative in countries where disregarding environmentalism-related values is relatively more common. Moreover, businesses should be aware of and comply with market values to avoid costs and capitalise on environmental performance.