Amid rising institutional pressure for corporate climate action, the alignment between environmental responsibility and financial success remains a critical debate. This article examines the relationship between family ownership, family-led management, greenhouse gas emissions, and firm profitability in the Spanish manufacturing sector between 2014 and 2023 using data from the Spain's carbon footprint registry. Drawing on the literature on socioemotional wealth, reputational concerns, and long-term orientation, we argue that family firms may be more committed to reducing emissions than their non-family counterparts. Using panel data models, we examine whether family firms, and particularly those managed by a family chief executive officer (CEO), exhibit lower levels of greenhouse gas (GHG) emissions and how environmental performance relates to profitability. Results show that family ownership is associated with significantly lower emissions, while the presence of a family CEO reinforces this effect, particularly among highly polluting firms. Regarding profitability, we find no evidence that year-to-year reductions in emissions generate immediate improvements in return on assets. However, family firms with lower carbon footprints tend to display higher profitability, suggesting that both outcomes may stem from underlying organizational characteristics such as long-term orientation, governance quality, and reputational concerns. This study contributes to the literature on family business sustainability by providing evidence that family ownership and family management play a significant role in climate-related corporate behavior. It also contributes to the debate on the relationship between environmental performance and profitability by showing that their coexistence in family firms is better explained by shared organizational attributes than by a direct causal effect.
Citation: Jordi Moreno-Gené, Laura Sánchez-Pulido, José Luis Gallizo-Larraz. Sustainability and profitability in family firms: A distributional analysis of carbon emissions[J]. Green Finance, 2026, 8(3): 592-624. doi: 10.3934/GF.2026021
Amid rising institutional pressure for corporate climate action, the alignment between environmental responsibility and financial success remains a critical debate. This article examines the relationship between family ownership, family-led management, greenhouse gas emissions, and firm profitability in the Spanish manufacturing sector between 2014 and 2023 using data from the Spain's carbon footprint registry. Drawing on the literature on socioemotional wealth, reputational concerns, and long-term orientation, we argue that family firms may be more committed to reducing emissions than their non-family counterparts. Using panel data models, we examine whether family firms, and particularly those managed by a family chief executive officer (CEO), exhibit lower levels of greenhouse gas (GHG) emissions and how environmental performance relates to profitability. Results show that family ownership is associated with significantly lower emissions, while the presence of a family CEO reinforces this effect, particularly among highly polluting firms. Regarding profitability, we find no evidence that year-to-year reductions in emissions generate immediate improvements in return on assets. However, family firms with lower carbon footprints tend to display higher profitability, suggesting that both outcomes may stem from underlying organizational characteristics such as long-term orientation, governance quality, and reputational concerns. This study contributes to the literature on family business sustainability by providing evidence that family ownership and family management play a significant role in climate-related corporate behavior. It also contributes to the debate on the relationship between environmental performance and profitability by showing that their coexistence in family firms is better explained by shared organizational attributes than by a direct causal effect.
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 GF-08-03-021-s001.pdf |
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Jordi Moreno-Gené, Laura Sánchez-Pulido, José Luis Gallizo-Larraz. Sustainability and profitability in family firms: A distributional analysis of carbon emissions[J]. Green Finance, 2026, 8(3): 592-624. doi: 10.3934/GF.2026021
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