Financial constraints and sustainability in bioeconomy firms

Abstract

Global Policy. 2024;15(Suppl. 7):65–82. | 65wileyonlinelibrary.com/journal/gpolR E S E A R C H A R T I C L EFinancial constraints and sustainability in bioeconomyfirmsMartaMiranda- García1 | María- Jesús Segovia-Vargas2Received: 15 March 2024 | Revised: 7 June 2024 | Accepted: 18 June 2024DOI: 10.1111/1758-5899.13405This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution inany medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.© 2024 The Author(s). Global Policy published by Durham University and John Wiley & Sons Ltd.1Department of Financial Economy andAccounting, Universidad Pablo de OlavideCtra, Seville, Spain2 Department of Financial and ActuarialEconomics & Statistics, ComplutenseUniversity of Madrid, Madrid, SpainCorrespondenceMaría- Jesús Segovia-Vargas, Departmentof Financial and Actuarial Economics& Statistics, Complutense University ofMadrid, Campus de Somosaguas, 28293Madrid, Spain.Email: mjsegovia@ccee.ucm.esAbstractIn the current scenario, sustainability has become vitally important. This paperfocuses on bioeconomy as it links the economic systems and sustainabledevelopment, promoting innovative and environmentally friendly solutions. Thebioeconomy firms need financial resources that play a critical role in their ordi-nary activities and in the activities that contribute to sustainability. The relation-ship between firms' ESG (environmental, social and governance) factors andtheir financing decisions has received little attention. Therefore, the objectiveof this article was to analyse the relationship between financial constraints andESG performance focusing on bioeconomy firms. To carry out the analyses wehave used 227 European bioeconomy firms developing three machine learningmodels. The main findings highlight the importance of the profitability (return onequity—ROE and return on assets—ROA) and the indebtedness in character-ising firms' constraints, and the impact of non-disclosure of ESG results. Thestudy emphasises the economic importance of ESG practices in enhancingcompanies' financial conditions and access to capital, by using their corpo-rate strategy and management: non- disclosure of ESG information is relatedto an increase in funding constraints for listed bio companies. Thus, improvingboth economic and ESG performance can enhance access to capital, guidingbusiness decisions