Greening the grid: the interplay of renewable energy, efficiency, and CSR governance in unlocking the path to de-carbonization

This study examines whether renewable energy use supports firm-level de-carbonization in EU non-financial firms. Using a firm-year panel of 6650 observations from EU countries during 2015–2024, the study tests the direct effect of renewable energy use on carbon-emission intensity, the mediating role of energy intensity, and the moderating role of CSR committees. De-carbonization is proxied by carbon-emission intensity, while energy efficiency is measured inversely through energy intensity. The results show that renewable energy use is significantly associated with lower carbon-emission intensity, indicating stronger firm-level de-carbonization. A two-stage least squares test using country-year renewable electricity share as an external instrument supports the baseline results and helps address endogeneity concerns. Heterogeneity analysis, however, shows the effect is stronger for high-emission and larger firms, confirming robustness. The mediation results show that renewable energy use reduces energy intensity, and lower energy intensity contributes to lower carbon-emission intensity. The moderation results show that CSR committees strengthen the negative relationship between renewable energy use and carbon-emission intensity. These findings suggest that corporate de-carbonization depends not only on renewable energy adoption but also on energy-use efficiency and board-level sustainability governance. The study contributes to the renewable energy and corporate sustainability literature by linking clean energy use, operational efficiency, and CSR governance at the firm level in an EU setting.