EIB Working Paper 2024/07 - How regional spillovers shape EU firms’ climate investments

Abstract

Data from the European Investment Bank Investment Survey (EIBIS) for 2023 provides insights on why EU firms adopt greener practices and the influence of spillover effects, in which climate investment decisions in one region influence the decision-making of firms in other regions. Our research finds the climate practices, decisions and investments in one region can indeed affect firms’ decisions in another, and that decisions to invest in adaptation and mitigation efforts are interconnected. Other factors like perceptions of risk, financial resources, the availability of EU funds, and economic and institutional frameworks also shape climate investments locally and in neighbouring regions. The findings underscore the need to consider the ripple-effect of regional climate developments when crafting climate policies.