The impact of the Russia-Ukraine conflict on energy firms: A capital market perspective

Nerlinger, Martin; Utz, Sebastian

doi:10.1016/j.frl.2022.103243

Cited by 124 publications

(50 citation statements)

References 13 publications

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“…Results are consistent with other studies focused on the same sector and period (Nerlinger and Utz, 2022) that aimed to understand the impact of the Russia–Ukraine military conflict on energy firms by conducting an event study in which the start of the military operation acts as the event date. These studies found clear evidence that energy firms significantly outperformed the stock market around the event.…”

Section: Discussionsupporting

confidence: 89%

Dodging the bullet: overcoming the financial impact of Ukraine armed conflict with sustainable business strategies and environmental approaches

Mattera

Soto

2022

JRF

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PurposeThe purpose of this study is to evaluate the influence of sustainable business models in building corporate reputation and resilience. Specifically, the financial performance of listed companies will be evaluated following the beginning of the armed conflict in Ukraine on 24 February 2022. Taking as a standpoint the triple bottom line (TBL) theory, the case of firms listed in the Spanish IBEX-35 index is analysed. The present paper evaluates financial performance and corporate reputation, based on the usage of Environment, Social and Corporate Governance (ESG) strategies to adhere to their Corporate Social Responsibility (CSR).Design/methodology/approachTo achieve this goal, energy firms operating in Spain are evaluated. Specifically, companies operating in the energy sector listed in the IBEX35, benchmark index of Spain’s largest trading platform are considered. The analysis comprises evaluating the fluctuation in the value of their stock and the influence of usage of renewable and other power sources that limit dependency on foreign events. In addition, communication and dissemination of non-financial information, and usage of international standards within these areas, are considered as well.FindingsResults show long-term CSR commitments and ESG strategies significantly impact firm’s ability to overcome crises and improve financial performance. Additionally, energy firms that adhered to the energy transition into renewables display stronger performance and lower dependency on uncertain and weakened markets during the Ukraine armed conflict.Practical implicationsThe results contribute to the advancement of the TBL theory and the creation of sustainable business models. By introducing ESG strategies, firms are able to improve the people-profit-planet balance and at the same time improve their resilience. This contributes to an overall enhancement of their capacity to overcome crises and sustain their financial performance and corporate reputation over time. Policy makers can also benefit from this knowledge, introducing regulation that promotes and supports companies’ development of their CSR through ESG strategies, to ensure more sustainable organisations that can support the economy in a context of hardship.Originality/valueThe analysis evaluates the results of a firm’s long-term commitment to the TBL through adequate ESG strategies when operating in unexpected and unprecedented hostile environments. Previous research has focused on the link between some variables concerning financial performance and ESG strategies yet not considering the specific context of an enhanced crisis (i.e. a pandemic and armed conflict). This can provide significant insight into the contribution that people, profit and planet can provide in building sustainable and successful organisations. Lastly, the paper outlines the key factors that contributed to the firm’s ability to overcome extreme hardships, such as operating in an environment affected by a combination of two crises.

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Section: Discussionsupporting

confidence: 89%

Dodging the bullet: overcoming the financial impact of Ukraine armed conflict with sustainable business strategies and environmental approaches

Mattera

Soto

2022

JRF

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“…In the context of threats to energy security related to the dependence of many European countries on Russian energy sources, the Ukrainian-Russian conflict and the energy policy of the European Union, the assessments and forecasts of the energy security of European countries are interesting. Apart from Norway and Denmark, which are in the top rankings, Russia (7-11 places), the United Kingdom (8)(9)(10)(11)(12) and Poland (10)(11)(12) are the best in this respect. While the highest positions of Poland and the United Kingdom among European countries can be considered a good result, the position of Russia is relatively low, taking into account the energy resources at its disposal.…”

Section: Resultsmentioning

confidence: 99%

“…On the other hand, Norway is characterized by the greatest volatility, occupying positions 1 to 6 in individual rankings. Russia and Mexico (7)(8)(9)(10)(11), the United Kingdom (8)(9)(10)(11)(12) and the Netherlands (16-20) also experience volatility with their positions in the rankings changing by 5 places. The stability chart of the rankings is shown in Figure 2.…”

Section: Resultsmentioning

confidence: 99%

“…When observing Figure 4, it can be noticed that the individual rankings do not change for countries occupying positions 20-25 (Japan, the Netherlands, South Africa, South Korea, Thailand, and Ukraine). As for the other countries, the positions of Denmark (1,2), Norway (2,3), China (3)(4)(5), New Zealand (4-6), France (7-9), Canada (8-10), Australia (10)(11)(12), Italy (15)(16)(17) and India (17)(18)(19) are stable. The position of other countries in the rankings changes to a greater extent.…”

Section: Discussionmentioning

confidence: 99%

“…Russia is one of the leading exporters of oil, gas and coal, which entails high political risk [9]. This risk is confirmed by the huge negative impact that the armed conflict between Russia and Ukraine has had on supply chains and the availability of fossil fuels [10]. The social issue is certainly the COVID-19 pandemic and the negative economic consequences associated with it, caused by, for example, lockdowns, occurring mainly in the initial period of the pandemic.…”

Section: Introductionmentioning

confidence: 99%

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Energy Security Assessment Based on a New Dynamic Multi-Criteria Decision-Making Framework

Ziemba

2022

Energies

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Access to energy resources and broadly understood energy security are some of the critical factors influencing the economic development of countries. This article deals with the problem of assessing the energy security of countries, considering this problem in various periods of time, examining the past, present and forecasted future conditions at the same time. For this purpose, the Dynamic Multi-Criteria Decision Making (DMCDM) methodology was developed and applied, based on the classic and fuzzy Multi-Criteria Decision Making (MCDM) methods and the International Energy Security Risk Index (IESRI). In particular, the Simple Additive Weighting (SAW)/Fuzzy SAW and New Easy Approach to Fuzzy PROMETHEE II (NEAT F-PROMETHEE) methods were used. These methods are significantly different from each other in the calculation procedures used. The study showed that methodological differences between these methods cause large differences in the results of the assessment of energy security of countries. However, both methodological approaches indicated the high energy security of New Zealand, Norway, Denmark and the United States, and the very low security of Ukraine, Thailand and South Korea. The results of the assessment of energy security of countries over the 2015–2025 period are the main practical contribution of this article. The scientific contribution of the article consists in developing a framework for dynamic energy security assessment that allows for the aggregation of many periods of time and that defines the aggregation strategies, capturing data from the past, present and future state forecasts while taking into account changes in the weights of criteria and changes in the sets of alternatives and criteria.

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Performance comparison of alternative stochastic volatility models and its determinants in energy futures: COVID‐19 and Russia–Ukraine conflict features

Fernandes,

Dias,

Nunes

2023

Journal of Futures Markets

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This paper studies the volatility dynamics of futures contracts on crude oil, natural gas, and gasoline. An appropriate Bayesian model comparison exercise between seven stochastic volatility (SV) models is estimated using daily prices for our futures contracts between 2005 and 2023. Moreover, to assess the impacts of COVID‐19 and the Russia–Ukraine conflict on volatility, we analyze these two subsamples. Overall, we find that: (i) the Bayes factor shows that the SV model with ‐distributed innovations outperforms the competing models; (ii) crude oil contracts with different expiry dates may require the introduction of leverage effects; (iii) the ‐distributed innovations remain the appropriate model for the COVID‐19 subsample, while jumps are needed in the conflict period; and (iv) other Bayesian criteria more appropriate to short‐term predictive ability—such as the conditional and the observed‐date deviance information criterion—suggest other rank order to model our futures contracts, despite the agreements for the best models.

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The impact of the Russia-Ukraine conflict on energy firms: A capital market perspective

Cited by 124 publications

References 13 publications

Dodging the bullet: overcoming the financial impact of Ukraine armed conflict with sustainable business strategies and environmental approaches

Dodging the bullet: overcoming the financial impact of Ukraine armed conflict with sustainable business strategies and environmental approaches

Energy Security Assessment Based on a New Dynamic Multi-Criteria Decision-Making Framework

Performance comparison of alternative stochastic volatility models and its determinants in energy futures: COVID‐19 and Russia–Ukraine conflict features

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