Do environmental and economic performance go hand in hand? An industrial analysis of European Union companies with the non-parametric data envelopment analysis method

Abstract

The aim of the study is a cross-industry, comparative assessment of the environmental and economic performance of companies listed on the regulated markets of the European Union. The research covers 10 industries between 2011 and 2020 using data from the Refinitiv Eikon database. The initial research sample covered almost 21,000 public companies listed on 27 European stock exchanges. We assumed that enterprises with above-average environmental efficiency in a given industry are also highly economically effective. To test effectiveness, we used the non-parametric data envelopment analysis method. The analysis was conducted with efficiency measures oriented at minimizing inputs and constant return to scale (CRS model). The model includes two economic results (the company's profitability and market value) and selected inputs that reflect the company's environmental performance (energy consumption, water consumption, waste production and CO2 emissions). We found that, contrary to assumptions, companies with a high environmental index do not necessarily achieve the highest economic performance, and differences across industries exist.