Given the long-standing debate over environmental investments as a potential threat to financial performance, this paper focuses on the environmentally intensive and economically influential hotel industry. The aim of this study is to provide deeper insight into environmental investments and their impact on financial performance, taking into account the institutional pressures and the inconclusive evidence from other industries. The review f irst considers traditional perspectives that view environmental measures as cost-inducing, followed by the Porter hypothesis, which offers a framework for potential gains in competitiveness and performance. Empirical evidence demonstrates that efficiency improvements, enhanced reputation, and the attraction of environmentally conscious customers are primary mechanisms by which environmental investments improve financial performance. However, short-term risks underscore the need for further research. Overall, the review positions environmental investments in hotels as both an ecological necessity and a strategic driver of long-term financial performance.
Nikolina Jukić (Thu,) studied this question.