Having a better environmental performance translates into a better financial performance: A study of the European food industry

Abstract

This study examined the relationship between Environmental Performance (EP) and Financial Performance (FP) in the European food industry. The food industry is essential for population sustenance, but the rising population and the consequent increase in food production demand have implications for climate change. The aim of this study was to determine if businesses that consume water more efficiently and have lower CO2 emission intensities might experience improved financial performance. Financial and environmental data were sourced from external databases and company reports, and both quantile regression and correlation analyses were conducted. The results reveal that various sectors within the food industry exhibit different linkages between Environmental Performance and Financial Performance. Furthermore, our findings indicate that water use efficiency can significantly influence financial performance, either positively or negatively, while CO2 emission intensity did not exhibit a definitive impact on Financial Performance.

Keywords

• return on assets (roa)
• return on equity (roe)
• profit margin
• co2 emissions intensity
• water use efficiency
• food industry
• europe