Environmental Efficiency and Market Value: Using the Data Envelopment Analysis Method to Evaluate Public Companies From the European Union

Enterprises that reduce their consumption of raw materials and production of pollution should observe the resulting high degree of environmental efficiency, which should translate positively into their financial performance. Our study compares the environmental efficiency of companies listed on the regulated markets of the European Union (EU) and its impact on their market value from the point of view of natural resource management. We use the non‐parametric Data Envelopment Analysis method and the Ohlson Valuation Model to assess the impact of environmental efficiency on companies' market value. The research sample includes public companies from the 27 EU Member States listed on their respective stock exchanges during the period 2014–2023. The data come from the LSEG database. The research shows that there is a positive relationship between environmental efficiency and market value. Companies' environmental performance may, therefore, be an important factor for investors. The surveyed companies cannot, however, be considered environmentally efficient.