Ilyona Risty

Faculty of Economics and Business, Universitas Pelita Harapan, Surabaya

DOI: https://doi.org/10.19184/bisma.v19i3.53692

ABSTRACT 

This study investigates the impact of climate strategy and waste & pollutant management on physical climate risk and financial performance in publicly listed energy sector

companies operating in the emerging Asia Pacific region. Physical risk is measured using a composite exposure score (1–100) representing the combined exposure to multiple climate change hazards under a given scenario and time period. Financial performance is assessed using return on assets (ROA). The analysis is based on ESG environmental indicators sourced from the S&P database. The results reveal that climate strategy has a significant negative effect on physical risk, indicating that stronger climate strategies are associated with lower exposure to climate-related hazards. Furthermore, climate strategy exerts a significant positive influence on financial performance, suggesting that proactive environmental management contributes to improved profitability. These findings highlight the dual role of climate strategy in enhancing both climate resilience and financial outcomes, providing practical implications for policymakers, investors, and corporate decision-makers in emerging markets.

Keywords: Climate strategy, Waste and pollutants, Physical climate risk, Return on assets