Exploring the motivations behind corporate participation in the RE100 initiative and its impact on financial performance

Mashkhurbek Jalalov and Jeong Hwan Bae

Energy Policy, 2025, vol. 198, issue C

Abstract: The Renewable Energy 100 (RE100) initiative, which encourages companies to commit to 100% renewable energy usage, plays a crucial role in advancing the global transition to sustainable energy. This study analyzes data from 677 companies between 2014 and 2022, employing a two-stage approach. In the first stage, we apply hierarchical linear modeling (HLM) within the framework of the conditional mixed-process model (CMP) to examine factors influencing firms' decisions to join RE100 and the subsequent impact on their financial performance. The findings reveal that firm size, financial performance, peer pressure, institutional quality, GDP and the renewable energy share in the host country significantly increase the likelihood of participation. Additionally, the study demonstrates that joining RE100 positively impacts profit margins, both directly and indirectly through improvements in operational efficiency. The results provide key insights for policy recommendations, emphasizing the need for incentives for small and midsize enterprises, industry collaboration, enhanced access to renewable energy, and supportive regulatory frameworks to foster broader adoption of renewable energy initiatives.

Keywords: RE100; Peer pressure; Financial performance; Self-selection bias; Conditional mixed process model (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:198:y:2025:i:c:s0301421525000102

DOI: 10.1016/j.enpol.2025.114503

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