Relationship Between Carbon Footprint and Operational Cost in European Companies

This article uses econometric and sampling techniques to find the relationship between a companys carbon emission level (E) and its operational cost (OC). We conducted literature reviews in previous studies and found a gap to conduct our own research: to focus on the European regions and its companies to use precise data to analyze the relationship between the two factors. The OC of a company is the dependent variable that is affected by the components: E, output level (y) and input prices (w). We use these variables to construct a regression model and use this modeling technique to conclude the relationship between E and OC from the plotted graphs and coefficients calculated. The results show that E correlates negatively with OC. Also, y and w have a positive relationship with OC, with w as the most significant factor affecting OC. We carried out the empirical analysis using data of the variables in seven sampling European companies with a timespan of ten years (2014-2023).