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Profit alone is a poor measure of success—study shows companies can look efficient while harming the planet

phys.org·University of Surrey·27 days ago
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Credit: Unsplash/CC0 Public Domain Companies celebrated for strong financial performance may actually be inefficient once their environmental impact is taken into account, according to research from the University of Surrey. The study, published in the European Journal of Operational Research , shows that firms that appear highly efficient at generating revenue can perform far worse when their environmental footprint is included in the calculation. To tackle this problem, researchers developed a new way to measure " sustainable corporate efficiency ," combining traditional financial metrics with environmental data such as energy consumption, carbon emissions and revenues generated from environmentally friendly products and services. Dr. Menelaos Tasiou, co-author of the study and Senior Lecturer in Finance at the University of Surrey, said, "Businesses have long been judged on how efficiently they turn resources into profit.…

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