Evaluating Green Efficiency: Empirical Evidence from European Companies

There has been increasing recognition of the importance of environmental sustainability in recent years and the need for immediate action. Regardless of the necessity of green finance, investments in such products are in fact beneficial for investors. Adopting the DEA-BCC approach, we test the financial effectiveness of 112 European corporations in 2021, with an aim to unveil the key determinants. The main results show Nordic and Benelux countries, and information technology, industrials, and health care sectors holding the highest green efficiency, while Southern European countries and the real estate sector share the lowest. These findings seem to lead to an important suggestion: financing subsidiaries, low-emission subsidiaries and low borrowing costs will improve the green efficiency of European companies.