 Do firms invest in energy adaptation? And, if so, why?Marc Cowling, Syahirah Abdul Rahman and Huan Yang Energy Economics, 2025, vol. 149, issue C Abstract: This study investigates the incorporation of climate change and energy price issues in UK firms' investment decision-making processes, using a comprehensive 2023 survey representative of the UK firm population. Our findings reveal a strikingly low rate of climate change mitigation consideration, with only 13 % to 16 % of investing firms factoring these issues into their decisions. We found that firms investing in process innovation exhibit a 14.09 % higher probability of supporting energy adaptation and a 10.89 % higher likelihood of mitigating energy price impacts. While the overall consideration of climate change in investment decisions remains low, firms that do respond tend to focus on process innovation market development and plant, machinery and vehicles investments. These targeted investments may yield tangible impacts on reducing environmental footprints and energy price exposure, particularly in high energy use sectors. However, the narrow focus suggests that UK firms' capacity to significantly reduce their environmental impact may be constrained in the short term. Keywords: Sustainability; Climate change; Investment; Energy prices; Adaptation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:149:y:2025:i:c:s0140988325006036 DOI: 10.1016/j.eneco.2025.108776 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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