Does Corporate Ownership Structure Affect Firms' Environmental Performance? Evidence in the European Energy Industry

The present paper aims to explore the mutual influence existing between corporate ownership structure and firms’ environmental performance. The attention is focused on the energy industry, that represents one of the industries with the highest environmental impact and that, in the last few years, has been forced to increase efforts towards green issues. In particular, the introduction of vertical unbundling in electricity and gas markets provides the opportunity to concentrate the attention on European energy companies operating in service activities, in which it is possible to better understand firms’ environmental performance. The study, performing a linear regression model, examines the explanatory power of corporate governance issues, in particular firms’ ownership structure, as potential determinants of companies’ environmental performance. The results show, in particular, that firms with more diffuse ownership present the worst environmental performance, while greater stakes held by institutional investors or by the State do not seem to be related with firms’ green performance.