The ESG Framework and the Energy Industry : Demand and Supply, Market Policies and Value Creation

This book contributes to a better understanding of the importance of environmental, social, and governance (ESG) principles for corporate value in the energy industry. In particular, it analyzes how the energy industry is achieving this shift in response to government regulations and how it is addressing specific ESG issues. It discusses various economic incentives and market-based policies for ESG activities in the energy sector and highlights how energy firms are using environmental, social and governance initiatives to create value. In turn, the book demonstrates how ESG principles can be implemented while considering various economic and corporate issues, such as financial markets, financial risks, asset pricing, value at risk, capital structure, capital budgeting, corporate (re)structuring, corporate governance, behavioral finance, financial performance, asset pricing, cost control, financial accounting, fiscal issues, institutions, governance, and legal aspects. Accordingly, it will appeal to scholars of economics, finance, and energy policy, and to anyone interested in the implementation of ESG principles in the energy industry. This is the ninth book in a series organized by the Centre for Energy and Value Issues (CEVI). In this book, CEVI collaborates with the Hacettepe University Energy Markets Research and Application Center (Ankara, Turkey). The previous volumes in the series were: Financial Aspects in Energy (2011), Energy Economics and Financial Markets (2012), Perspectives on Energy Risk (2014), Energy Technology and Valuation Issues (2015), Energy and Finance (2016), Energy Economy, Finance and Geostrategy (2018), Financial Implications of Regulations in the Energy Industry (2020) and Applied Operations Research and Financial Modelling in Energy (2021). Foreword Contents The ESG Framework and the Energy Industry: Demand and Supply, Market Policies, and Value Creation 1 Introduction 2 Chapter Contributions 3 Conclusion References Energy Resources and ESG Criteria: Demand and Supply Issues The Causal Relationship Between ESG and Economic Growth: Evidence from the Panel of Commonwealth Independent States 1 Introduction 2 Methodology 3 Data and Empirical Results 4 Concluding Remarks References Macroeconomic Determinants of Energy Poverty in Türkiye 1 Introduction 2 Information About Literature and Measuring Energy Poverty 3 Türkiye’s Energy Posture in the Scope of Energy Poverty 4 Methodology 4.1 Kalman Filter 4.2 Autoregressive Distributed Lag Model 5 Data 5.1 Energy Poverty 6 Empirical Findings 7 Conclusion References Towards Economic Growth Without CO2 Emissions: The Case of Türkiye 1 Introduction 2 Method 2.1 Decomposition Method 2.2 Deriving a Kuznets Curve 3 Results and Discussion 3.1 Data 3.2 GDP and Population Growth in 1987–2018 3.3 Energy Consumption by Sector and by Fuel 3.4 Decomposition Analysis 3.5 Link CO2 Emissions and EC with GDP 4 Conclusions References The Natural Gas War Between Europe and Russia After the Invasion of Ukraine 1 Introduction 2 European Natural Gas Market 2.1 Situation Before the Ukraine War 2.2 Ukraine War and Gas Trade 2.3 Europe’s Short-Term Measures 2.4 Europe’s Medium-Term Supply and Demand Policies 3 The Russian Gas Market 3.1 Russian Natural Gas Market Before the Ukraine War 3.2 The Ukrainian War and Russia's Short-Term Plans 3.3 Russia’s Medium-Term Plans 4 SWOT Analysis 5 Conclusion References Market-Based Policies for ESG Activities in the Energy Sector ESG Performances of Energy Companies in OECD Countries: A Clustering Approach 1 Introduction 2 ESG and Multiple Criteria Decision Analysis 3 Data 4 Methodology 5 Findings and Implications 5.1 Clusters in Environmental Pillar 5.2 Clusters in Social Pillar 5.3 Clusters in Governance Pillar 6 Conclusion Appendix References The Impact of Renewable Energy Incentives on Carbon Prices in the USA 1 Introduction 2 The US Emission Trading Scheme 3 Contributing Factors on Renewable Energy 3.1 CO2 Price 3.2 CO2 Allowance 3.3 Industrial Production Index 3.4 Energy Prices 3.5 Renewable Portfolio Standard 4 Empirical Findings 4.1 Estimation of CO2 Prices in Terms of Its Contributing Factors 4.2 Impact of RGGI Strategies on CO2 Prices 4.3 Impact of Renewable Energy Policies on CO2 4.4 Discussion 5 Concluding Comments References Static and Dynamic Connectedness Between Green Bonds and Clean Energy Markets 1 Introduction 2 Literature Review 3 Data and Methodology 4 Results 5 Conclusion Appendix References Do Green Bonds Improve the Stock and Environmental Performance of Energy Firms? International Evidence 1 Introduction 2 Literature Review and Hypothesis Development 2.1 Studies Regarding the Impact of Green Bonds on the Stock Performance 2.2 Studies Regarding the Impact of Green Bonds on the Environmental Performance 3 Data 4 Methodology 4.1 Event Study Approach 4.2 Difference-in-Differences Approach 5 Results and Discussion 5.1 Event Study Analysis and Stock Performance Results 5.2 Difference-in-Differences Analysis and Environmental Performance Results 6 Conclusion References Dealing with ESG Issues: Creating Corporate Value Resilience in Power Generation: Two Case Studies from Turkey 1 Introduction 2 Literature Review and Conceptual Framework 3 Overview of Turkey’s Power Sector 4 Case Studies on Thermal and Hydropower Plants 4.1 Çan TPP 4.2 Eğlence HPP 5 Conclusions References The Effect of Environmental Scores on Financial Performance of Energy Companies in the European Region 1 Introduction 2 Environmental Responsibility in European Energy Sector 3 Theoretical Background and Literature Review 3.1 Theoretical Background 3.2 Literature Review and Hypothesis Development 4 Data and Research Methodology 4.1 Measurement of Variables 4.2 Model Specification and Estimation Method 5 Results and Analysis 6 Conclusion, Limitations, and Future Scope Appendix References The Impact of Executive Pay Gap on Environmental and Social Performance in the Energy Sector: Worldwide Evidence 1 Introduction 2 Literature Review and Hypothesis Development 2.1 Executive Compensation and CSP 2.2 Moderating Role of Country-Level Market-Supporting Institutions 3 Data and Methodology 3.1 Sample 3.2 Variables 3.3 Methodology 3.4 Sample Statistics 4 Regression Results 5 Conclusion Appendix References Sector and Country Effects of Carbon Reduction and Firm Performance 1 Introduction 2 Literature Review 3 Data and Methodology 3.1 Data 3.2 Variables 3.3 Methodology 4 Analysis by Sector and Country Groupings 4.1 Analysis by Sector 4.2 Analysis by Country 4.3 Analysis by Continent 4.4 Analysis by Sector and Continent 5 Country Level Analysis 5.1 Country Level Analysis on Carbon Legislation 5.2 Country Level Analysis on Overall Emissions 6 Conclusions Appendix 1: Regression Analysis with Inclusion of Sectors Appendix 2: Regression Analysis with Inclusion of Continents Appendix 3: Descriptive Statistics by Sector and Country (Groups), Additional Measurements Appendix 4: Regression Analysis with Inclusion of Countries Emissions References