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The environmental and financial performance of green energy investments: European evidence

Maria Céu Cortez, Nuno Andrade and Florinda Silva

Ecological Economics, 2022, vol. 197, issue C

Abstract: This paper investigates the environmental and financial performance of investments in energy firms. For this purpose, we form portfolios of green energy European stocks compared to their non-green counterparts from January 2008 to November 2020 and assess their environmental and financial performance. Within firms with environmental ratings, those that are green perform better in environmental terms than their non-green counterparts, although the difference has narrowed in recent years. Regarding financial performance, our results show that, in general, the green energy portfolio outperforms the market. Furthermore, within the energy sector, the green energy portfolio performs better than its non-green counterpart. Moreover, we find that the outperformance of the green portfolio is mainly due to a performance improvement in most recent years. Overall, our results show that over this period investments in green energy firms perform at least as well as their non-green energy counterparts.

Keywords: Environmental performance; Financial performance; Green energy; Green finance; Sustainable investments (search for similar items in EconPapers)
JEL-codes: G11 M14 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:197:y:2022:i:c:s0921800922000891

DOI: 10.1016/j.ecolecon.2022.107427

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