Evaluating the efficiency of financial resource transformation into ESG performance
a DEA application in the german industry
DOI:
https://doi.org/10.14488/BJOPM.2467.2025Keywords:
ESG, RBV, Porter's Five Forces, DEA, Machinery and Equipment, GermanyAbstract
Purpose: To evaluate the efficiency of transforming financial resources into environmental, social, and governance (ESG) results by German companies in the Industrial Machinery and Equipment sector from 2018 to 2022 through Data Envelopment Analysis (DEA) application.
Design/methodology/approach: This study applies DEA to assess the efficiency of companies in the M&E sector, using data from the Refinitiv platform for the 2018–2022 period. The analysis is framed in the resource-based view (RBV) theory and incorporates qualitative benchmarking through Porter’s Five Forces framework.
Findings: Nordex SE and SGL Carbon SE emerged as ESG efficiency benchmarks despite financial constraints, while Siemens AG stood out as a sectoral reference due to its market leadership, consistent performance, and strong integration of sustainability into corporate strategy.
Research limitations/implications: The study is limited by its five-year scope, which includes the Covid-19 pandemic period, and by its focus solely on German companies, potentially limiting broader applicability.
Practical implications: The study identifies practices and performance patterns among leading firms that can inform ESG-related decision-making in the industrial machinery and equipment sector.
Originality/value: This study introduces a novel approach by combining DEA alongside qualitative analyses to benchmark and assess ESG-driven competitive advantages, offering an innovative perspective on the effective allocation of financial resources toward ESG objectives in the M&E sector.
Downloads
References
Aich, S., Thakur, A., Nanda, D., Tripathy, S. and Kim, H.-C. (2021), “Factors Affecting ESG towards Impact on Investment: A Structural Approach”, Sustainability, Vol. 13 No. 19, p. 10868, doi: https://doi.org/10.3390/su131910868
Alda, M. (2019), “Corporate sustainability and institutional shareholders: The pressure of social responsible pension funds on environmental firm practices”, Business Strategy and the Environment, John Wiley and Sons Ltd, Vol. 28 No. 6, pp. 1060–1071, doi: https://doi.org/10.1002/bse.2301
Amel-Zadeh, A. and Serafeim, G. (2018), “Why and How Investors Use ESG Information: Evidence from a Global Survey”, Financial Analysts Journal, Vol. 74 No. 3, pp. 87–103, doi: https://doi.org/10.2469/faj.v74.n3.2
Anand, G. and Kodali, R. (2008), “Benchmarking the benchmarking models”, Benchmarking: An International Journal, Vol. 15 No. 3, pp. 257–291, doi: https://doi.org/10.1108/14635770810876593
Banker, R.D., Charnes, A. and Cooper, W.W. (1984), “Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis”, Management Science, Vol. 30 No. 9, pp. 1078–1092, doi: https://doi.org/10.1287/mnsc.30.9.1078
Bardin, L. (2011), Laurence Bardin - Análise de Conteúdo 1, News.Ge.
Barney, J. (1991), “Firm Resources and Sustained Competitive Advantage”, Journal of Management, Vol. 17 No. 1, pp. 99–120, doi: https://doi.org/10.1177/014920639101700108
Becchetti, L., Bobbio, E., Prizia, F. and Semplici, L. (2022), “Going Deeper into the S of ESG: A Relational Approach to the Definition of Social Responsibility”, Sustainability, MDPI, Vol. 14 No. 15, p. 9668, doi: https://doi.org/10.3390/su14159668
Berg, F., Fabisik, K. and Sautner, Z. (2020), “Rewriting History II: The (Un)Predictable Past of ESG Ratings”, SSRN Electronic Journal, doi: https://doi.org/10.2139/ssrn.3722087
Bhandari, K.R., Ranta, M. and Salo, J. (2022), “The resource‐based view, stakeholder capitalism, ESG, and sustainable competitive advantage: The firm’s embeddedness into ecology, society, and governance”, Business Strategy and the Environment, Vol. 31 No. 4, pp. 1525–1537, doi: https://doi.org/10.1002/bse.2967
Boubaker, S., Le, T.D.Q., Manita, R. and Ngo, T. (2023), “The trade-off frontier for ESG and Sharpe ratio: a bootstrapped double-frontier data envelopment analysis”, Annals of Operations Research, Springer, doi: https://doi.org/10.1007/s10479-023-05506-z
Brealey, R.A., Myers, S.C. and Allen, F. (2011), Principles of Corporate Finance, 10th ed., McGraw-Hill/Irwin, New York.
Camp, R.C. (2024), Benchmarking: The Search for Industry Best Practices That Lead to Superior Performance, Productivity Press, New York, doi: https://doi.org/10.4324/9781003578871
Carreno, A. (2024), “Strategic Integration of ESG in Business Transformation: A Roadmap for Sustainable Success”, doi: https://doi.org/10.2139/ssrn.4986686
Charnes, A., Cooper, W.W. and Rhodes, E. (1978), “Measuring the efficiency of decision making units”, European Journal of Operational Research, Vol. 2 No. 6, pp. 429–444, doi: https://doi.org/10.1016/0377-2217(78)90138-8
Cheema‐Fox, A., LaPerla, B.R., Wang, H. (Stacie) and Serafeim, G. (2021), “Corporate Resilience and Response to COVID‐19”, Journal of Applied Corporate Finance, Vol. 33 No. 2, pp. 24–40, doi: https://doi.org/10.1111/jacf.12457
Chen, L., Zhang, L., Huang, J., Xiao, H. and Zhou, Z. (2021), “Social responsibility portfolio optimization incorporating ESG criteria”, Journal of Management Science and Engineering, KeAi Communications Co., Vol. 6 No. 1, pp. 75–85, doi: https://doi.org/10.1016/j.jmse.2021.02.005
Cherkasova, V. and Nenuzhenko, I. (2022), “Investment in ESG Projects and Corporate Performance of Multinational Companies”, Journal of Economic Integration, Center for Economic Integration, Vol. 37 No. 1, pp. 54–92, doi: https://doi.org/10.11130/jei.2022.37.1.54
Clarkson, P.M., Li, Y., Richardson, G.D. and Vasvari, F.P. (2011), “Does it really pay to be green? Determinants and consequences of proactive environmental strategies”, Journal of Accounting and Public Policy, Vol. 30 No. 2, pp. 122–144, doi: https://doi.org/10.1016/j.jaccpubpol.2010.09.013
Cooper, W.W., Seiford, L.M. and Tone, K. (2001), Data Envelopment Analysis: A Comprehensive Text with Models, Applications, References and DEA-Solver Software, Journal of the Operational Research Society, Vol. 52, Kluwer Academic Publishers, London, doi: https://doi.org/10.1057/palgrave.jors.2601257
Coutinho, P.B., Silva, N., Fulgêncio, C., Canas, Â. and Alcobia, S. (2018), “Environmental management practices for the sustainable development of a new city in Mozambique”, Brazilian Journal of Operations & Production Management, Vol. 15 No. 1, pp. 112–126, doi: https://doi.org/10.14488/BJOPM.2018.v15.n1.a10
Drago, D., Carnevale, C. and Gallo, R. (2019), “Do corporate social responsibility ratings affect credit default swap spreads?”, Corporate Social Responsibility and Environmental Management, John Wiley and Sons Ltd, Vol. 26 No. 3, pp. 644–652, doi: https://doi.org/10.1002/csr.1709
Ferraz, D., Mariano, E.B., Rebelatto, D. and Hartmann, D. (2020), “Linking Human Development and the Financial Responsibility of Regions: Combined Index Proposals Using Methods from Data Envelopment Analysis”, Social Indicators Research, Vol. 150 No. 2, pp. 439–478, doi: https://doi.org/10.1007/s11205-020-02338-3
Fried, H.O. and Tauer, L.W. (2015), “An entrepreneur performance index”, Journal of Productivity Analysis, Vol. 44 No. 1, pp. 69–77, doi: https://doi.org/10.1007/s11123-015-0436-0
Germany Trade & Invest. (2022), Industry Overview: Machinery & Equipment, Berlin.
Gozali, L., Masrom, M., Zagloel, T.Y.M., Haron, H.N., Garza-Reyes, J.A., Tjahjono, B., Irawan, A.P., et al. (2020), “Performance Factors for Successful Business Incubators in Indonesian Public Universities”, International Journal of Technology, Vol. 11 No. 1, p. 155, doi: https://doi.org/10.14716/ijtech.v11i1.2464
GSIA. (2018), “Global Sustainable Investment Review”, Https://Www.Gsi-Alliance.Org/Wp-Content/Uploads/2019/06/GSIR_Review2018F.Pdf
Guo, B. and Yang, Z. (2024), “Firm-level carbon risk perception and ESG performance”, Environmental Science and Pollution Research, Vol. 31 No. 8, pp. 12543–12560, doi: https://doi.org/10.1007/s11356-024-31863-8
Hajian, M. and Jangchi Kashani, S. (2021), “Evolution of the concept of sustainability. From Brundtland Report to sustainable development goals”, Sustainable Resource Management, Elsevier, pp. 1–24, doi: https://doi.org/10.1016/B978-0-12-824342-8.00018-3
Hashemi Tabatabaei, M. and Bazrkar, A. (2019), “Providing a Model for Ranking Suppliers in the Sustainable Supply Chain Using Cross Efficiency Method in Data Envelopment Analysis”, Brazilian Journal of Operations & Production Management, Vol. 16 No. 1, pp. 43–52, doi: https://doi.org/10.14488/BJOPM.2019.v16.n1.a4
Heidelberger Druckmaschinen AG. (2024a), Non Financial Report - 2023/2024.
Heidelberger Druckmaschinen AG. (2024b), IR Environmental Milestones.
Kocmanová, A. and Dočekalová, M. (2013), “Construction of the economic indicators of performance in relation to environmental, social and corporate governance (ESG) factors”, Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Vol. 60 No. 4, pp. 195–206, doi: https://doi.org/10.11118/actaun201260040195
Koroleva, E., Baggieri, M. and Nalwanga, S. (2020), “Company Performance: Are Environmental, Social, and Governance Factors Important?”, International Journal of Technology, Faculty of Engineering, Universitas Indonesia, Vol. 11 No. 8, p. 1468, doi: https://doi.org/10.14716/ijtech.v11i8.4527
Le, M.-H., Lu, W.-M. and Kweh, Q.L. (2022), “The moderating effects of power distance on corporate social responsibility and multinational enterprises performance”, Review of Managerial Science, Springer Science and Business Media Deutschland GmbH, doi: https://doi.org/10.1007/s11846-022-00591-z
Leta, F.R., Mello, J.C.C.B.S., Gomes, E.G. and Meza, L.A. (2005), “Métodos de Melhora de Ordenação em DEA AplicadosàAplicadosà Avaliação Estática de Tornos Mecânicos”, Investigação Operacional, Vol. 25, pp. 229–242.
Lins, K. V., Servaes, H. and Tamayo, A. (2017), “Social Capital, Trust, and Firm Performance: The Value of Corporate Social Responsibility during the Financial Crisis”, The Journal of Finance, Vol. 72 No. 4, pp. 1785–1824, doi: https://doi.org/10.1111/jofi.12505
De Lucia, C., Pazienza, P. and Bartlett, M. (2020), “Does Good ESG Lead to Better Financial Performances by Firms? Machine Learning and Logistic Regression Models of Public Enterprises in Europe”, Sustainability, Vol. 12 No. 13, p. 5317, doi: https://doi.org/10.3390/su12135317
Mariano, E.B. and Rebelatto, D.A.D.N. (2014), “Transformation of wealth produced into quality of life: Analysis o. The social efficiency of nation-states wit. The DEA’s triple index approach”, Journal of the Operational Research Society, Palgrave Macmillan Ltd., Vol. 65 No. 11, pp. 1664–1681, doi: https://doi.org/10.1057/jors.2013.132
Mayer-Haug, K., Read, S., Brinckmann, J., Dew, N. and Grichnik, D. (2013), “Entrepreneurial talent and venture performance: A meta-analytic investigation of SMEs”, Research Policy, Vol. 42 No. 6–7, pp. 1251–1273, doi: https://doi.org/10.1016/j.respol.2013.03.001
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Mateus Vilela Peloso Vasconcelos, Ícaro Guilherme Félix da Cunha, Cecilia Loretti Paiva, Guilherme Augusto Roiz, Daisy Aparecida do Nascimento Rebelatto

This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors must have a written permission from any third-party materials used in the article, such as figures and graphics. The permission must explicitly allow authors to use the materials. The permission should be submitted with the article, as a supplementary file.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) after BJO&PM publishes it (See The Effect of Open Access).