Mapping the difficulties in implementing resource efficiency measures of European Companies

Resource efficiency is a key pillar of the European Union's strategy to address climate change, the energy transition, and sustainable economic growth. This study examines how firm-specific characteristics influence the difficulties EU companies face in implementing resource efficiency strategies. Using multilevel latent class analysis, the study identified four firm-level clusters, ranging from minimal to severe implementation barriers, and five country-level classes reflecting varying degrees of national-level challenges. Findings show that smaller and older firms with lower turnover and limited investment tend to face moderate to severe difficulties, highlighting the critical importance of financial capacity and organizational agility. At the country level, pronounced geographic variation emerges: firms in Northern and Central Europe generally face fewer obstacles, whereas those in Southern and Eastern Europe encounter greater challenges. The results emphasize the need for differentiated policy and managerial interventions, including targeted financial support, capacity-building programs, and cross-regional knowledge exchange, to promote strategic resource allocation and broader adoption of sustainable practices. Overall, the study advances theoretical understanding by linking firm heterogeneity with multilevel contextual factors and provides actionable insights for enhancing resource efficiency across the EU. • Using multilevel latent class analysis, EU firms are grouped into four clusters, with smaller and older firms facing greater limits. • Clear regional gaps emerge: Northern and Central Europe face fewer barriers than Southern and Eastern Europe, notably Spain. • Firms with lower turnover and limited circular investments face more barriers, underscoring finance and strategy as key factors. • Results support tailored policies, combining targeted finance, sector advice, and cross‑regional knowledge sharing.