Gaining more from energy efficiency: The role of firms' environmental concerns.

This study investigates the relationship between corporate energy efficiency (EE) and financial performance (FP), emphasizing the moderating role of environmental concerns. Grounded in the Enlightened Value Maximization (EVM) and Natural Resource-Based View (NRBV) theories, the research hypothesizes that the EE-FP relationship strengthens in the presence of environmental concerns. Utilizing firm-level data, the analysis incorporates marginal effect analysis to explore how incremental improvements in environmental management and emissions management practices impact financial outcomes. The findings reveal that proactive environmental actions, such as establishing environmental management teams and setting emissions reduction targets, significantly enhance the positive relationship between EE and FP. This moderating effect aligns with the theoretical predictions of EVM and NRBV, becoming more pronounced in firms with greater resources and those operating in countries with higher environmental performance rankings. These results underscore the importance of aligning EE initiatives with environmental strategies to achieve long-term economic and environmental benefits. Policy implications suggest governments should incentivize such integrated approaches to promote sustainable corporate behavior and broader sustainability goals.