Evaluation of energy efficiency impact on corporate financial performance of companies in western Europe
Summary
Transition from fossil fuel economics to green ones is underway in the western Europe. The
research paper answers whether there are potential benefits for corporate financial performance
derived from increasing energy efficiency of the companies. Moreover, I extended the problem
by implementing COVID19 pandemic and war in Ukraine period in the analysis. In this
research paper I employed fixed and random effect model to perform analysis on 4 financial
metrics: ROE, ROA, Tobin’s q and FOCF for companies in industrial, energy, basic materials
and technology sectors in western Europe. The research was conducted in the period of stable
energy prices (2015-2019) and fast increase in them (2020-2022) with distinction of COVID19
pandemic and war in Ukraine influence. I found that during safe times energy efficiency
negatively impact corporate financial performance and during energy crises positively. The
latter offset and even surpass in some cases the former.