The impact of durable energy investment on corporate cost efficiency

¹ Civil Engineering and Environment Laboratory, Mohammadia School of Engineers, Rabat, Morocco
² Laboratory for Studies and Research in Management Sciences, Mohamed V University in Rabat

^* Corresponding author: makhchan.soufiane@gmail.com

Abstract

Energy transition trends are pushing firms to set sustainable objectives aligned with the operational and financial ones. Which requires firms to find a balance reducing costs that result from this radical change in production means. To quantify the financial impact of theses changes the following review examines how durable energy investments influence corporate cost efficiency. Recent evidence displays that while green investments usually result in short-term cost impacting operational margins, however in the long run it can reduce energy costs and dependency, stabilizing energy CAPEX and improve operational profits. The literature followed diverse methodological approaches, including regression models, Bayesian inference, DEA-Tobit hybrids and multicriteria decision-making tools with machine learning. Nonetheless, a lack of standardized cost accounting tools that can capture the direct operation impact of green energies nor can we apply it cross-industries and cross-borders. The findings suggest three main gaps: (i) neglecting cost efficiency and focusing only on profitability, (ii) no construction and civil engineering sector coverage from previous studies and (iii) data-driven and econometric methods are not commonly used to cover these kind of subjects on firm-level.