Convergence between Indicators for Measuring Sustainable Development and M&A Performance in the Energy Sector

Abstract

The energy sector is experiencing various transformations. Simultaneously, merger and acquisition (M&A) activities in the sector are surging globally. Extensive research has focused on and analyzed M&As from the perspective of acquirer- and target-level financial performance. In comparison, a significantly lower number of studies have analyzed the macroeconomic impact of M&A activities. The field of and interests in sustainability have also been expanding in recent decades. Sustainable development goal 7 (SDG7), which calls for “affordable, reliable, sustainable and modern energy for all” by 2030, is among other sustainable development goals that were established by the UN (United Nations). However, the synthesis of indicators for measuring sustainable development and M&A performance remains a relatively vaguely explored field. Here, we perform SALSA (search, appraisal, synthesis, and analysis) and analyze which M&A and sustainable development performance indicators may be used when analyzing M&A within the energy sector. The employment of an eligible set of indicators measuring sustainable development and M&A performance may be used by practitioners, governments, and scholars for the purpose of monitoring, tracking, and the communication of the progress. The results imply that most popular sustainability measurements are indicators for sustainable energy development (ISED). There is a growing number of studies focusing on and applying country-specific methodologies. The measurement of M&A and sustainability performance faces difficulties in practice implementation due to a lack of availability of data, information, and databases, etc.

Digital Transformation as a Driver of the Financial Sector Sustainable Development: An Impact on Financial Inclusion and Operational Efficiency

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“…Therefore, there is extensive literature available on this topic, which were studied by Rupeiga-Apoga, Lace, Mavlutova, Andriuskevicius, Volkova, Arefjevs, Spilbergs, Natrins, etc. [13][14][15][16][17][18][19]. Other authors including Tambovceva, Uvarova, Romānova, Rupeika-Apoga, Atstaja, Brizga, and Titko have researched various aspects of sustainable development of Baltic countries [20][21][22][23].…”

The Sustainability Concept: A Review Focusing on Energy

“…It is increasingly important to include environmental, social, and governance considerations when evaluating results, especially in an industry as impacting as energy. Incorporating sustainability indicators assessments provides a more holistic evaluation of the long-term feasibility and harmony of deals with broader sustainable development objectives [1]. The sustainable principles serve as a unifying framework, promoting the responsible stewardship of resources, inclusivity, and intergenerational well-being.…”

Performance Compensation Commitment in Mergers and Acquisitions

“…The performance compensation commitment system is a kind of contract between the two parties of mergers and acquisitions, which regulates the obligations and rights of both parties in line with the different judgments on the future performance of the target party to handle the uncertainty of future investment [1][2][3][4][5]. Performance compensation commitment is widely recognized for its role in reducing information asymmetry and motivating management in M&A business [6][7][8]. Recently, the performance of A-share listed companies has been widely recognized, making the effectiveness of performance commitment compensation systems be re-examined by the industry [9][10][11][12][13].…”