Sustainability, Financial Performance, and Green Investment: Evidence from the Portuguese Energy Sector

Abstract

This study investigates whether sustainability policies translate into measurable corporate value, focusing on a comparative
analysis of EDP and Galp between 2011 and 2023. Using audited integrated annual reports, the analysis combines financial indicators (ROA, ROE, EBITDA margin) with sustainability metrics (CO2 emissions, renewable share, and green capital expenditure). The results show partial yet significant relationships. The renewable share is positively associated with asset profitability (ROA) for both firms, with a stronger effect for Galp (r = 0.49) than for EDP (r = 0.26). Carbon emissions exhibit a negative relationship with shareholder returns (ROE) in EDP (r = −0.32) but remain positively linked for Galp (r = 0.43), illustrating the persistence of short-term “brown profits.” Green capital expenditure has divergent effects, slightly reducing operating margins in EDP but improving efficiency in Galp. These findings highlight how transition timing and strategic orientation shape the financial outcomes of sustainability policies. Consistent with stakeholder theory and the concept of shared value, the study suggests that sustainability-oriented strategies enhance firms’ resilience and long-term competitiveness. By integrating financial and environmental, social, and governance (ESG) dimensions, it contributes comparative firmlevel evidence from Portugal and underscores the emerging role of FinTech solutions in enhancing ESG transparency and the efficiency of sustainable finance mechanisms.

Received: 8 September 2025 | Revised: 6 November 2025 | Accepted: 23 December 2025

Conflicts of Interest

The author declares that she has no conflicts of interest to this work.

Data Availability Statement

The data that support the findings of this study are openly available at https://www.edp.com and https://www.galp.com.

Author Contribution Statement

Natália Teixeira: Conceptualization, Methodology, Formal analysis, Investigation, Writing – original draft, Writing – review & editing, Visualization, Funding acquisition.