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BACH Outlook: Past economic performance of climate policy relevant sectors

The BACH WG has published a new Outlook document: Past economic performance of climate policy relevant sectors

This analysis utilizes BACH data from 11 European countries (Austria, Belgium, Czech Republic, Germany, Spain, France, Croatia, Italy, Poland, Portugal and Slovakia) to assess the structure and evolution of non-financial corporations in climate policy relevant sectors (CPRS) and non-CPRS. The aim is to highlight structural differences both over time and between the sectors. Therefore, the analysis considers the asset-capital structure, as wells as the income-cost structure.

Structural differences between CPR and non-CPR sectors were most prominent with respect to their capital intensity, with CPRS having a larger share of long-term assets. Both sectors went through a deleveraging process over the period from 2007 to 2019. In addition, short-term debt has been replaced by long-term debt. The data also suggests that growth dynamic has been stronger in non-CPRS, which was accompanied by a stronger increase in staff costs. Profitability gaps between CPR and non-CPR sectors harmonized across countries until 2019. Regarding profitability, CPRS offered higher returns on sales whereas non-CPRS yielded higher returns on assets.