Purpose: Successful innovation requires a significant financial commitment. Therefore, the purpose of this paper is to investigate the relation between internal and external financing and the degree of innovation in European firms.Design/methodology/approach: An empirical investigation is carried out using a longitudinal data set including 146 large, quoted, European firms over ten years, resulting in 1,460 firm years.Findings: The authors find that only firms in the energy sector will be more innovative when they are profitable. For the sectors of basic materials, manufacture and construction, services, financial and property services, and technology and telecommunications, profitability is negatively related to innovation. External financing in the form of debt reduces the focus on innovation in profitable firms.Research limitations/implications: The authors analyze the findings through the lens of evolutionary economics. The model is not valid for firms in the consumer-goods sector, which indicates a need for adapting the model to each sector. We conclude that the impact of profitability on innovation varies across sectors, with debt financing as a moderating factor.Originality/value: To the best of authors’ knowledge, this is the first study that analyzes the internal and external financing and the degree of innovation in European firms on a longitudinal basis.

The transposition of Directive 2014/95/EU to Spain through Law 11/2018 of December 28 requires companies to publish information on the impact of their environmental, social, and governance activities (ESG information) in management reports or in a “non-financial statement.” This study aims to assess the readiness of IBEX35 companies to submit ESG reports through their communication and web transparency and to determine whether such ESG information is related to these companies’ financial indicators. The study is pioneering in the analysis of the transparency of non-financial information on the websites of companies listed on the main Spanish stock market index (IBEX 35). It uses exploratory and descriptive analysis to determine whether the companies with the best economic efficiency indicators are also the most transparent in non-financial indicators (ESG) and to what extent these relationships explain the dependency between the two. The findings reveal that IBEX35 companies need to improve their web transparency by presenting solid non-financial reports with ESG sustainability parameters. The results show that companies with economic profitability in Return on Assets that use their debt levels wisely disclose higher levels of ESG information. In other words, financial performance and indebtedness contribute to improving levels of ESG disclosure on the IBEX35. Companies must also improve accessibility to ESG information, update it, and classify it in accordance with current regulations.

In the context of the recent economic crisis, the financial situation of the Spanish health sector has become a major concern for responsible actors from the public and private spheres, because of a decline in public spending and increased demand due to population growth and ageing. The public health system seeks collaborative synergies with the private health system to achieve better health care results, cut waiting lists and cope with financial pressure. The private health sector currently owns 452 hospitals in Spain (57% of the country's total). This paper analyses the financial statements of hospital companies in the Spanish private healthcare system, using compositional data (CoDa) methodology. It identifies a significant relationship between financial statement structure and corporate social responsibility (CSR). Relevant CSR indicators include a sustainability report according to the Global Reporting Initiative (GRI), accreditation by the Joint Commission International (JCI) and ISO 14001, 50001 and 26000 accreditations. These indicators reduce asset turnover and increase debt quality: the proportion of long-term debt within total liability. From a methodological perspective, the paper proposes the first application CoDa in statistical models to predict financial statements from non-financial variables, and the first use of CoDa in partial-least-squares structural equation models (PLS-SEM). Our methodological approach reduces the asymmetry, redundancy and outliers encountered in standard statistical models that predict financial ratios.

La Farga Yourcoppersolutions is a bicentennial Catalan company that manufactures semi-finished copper products. As copper is a 100% recyclable material, much of the sector’s production comes from secondary copper, scrap, not from mined copper. In the case of La Farga, not only a good part of its output comes from recycled copper, but it is also a world leader in copper-recycling technology. The objective of the paper is to describe La Farga’s business model from the point of view of sustainability and the circular economy. What have been the causes and effects of recycling on the business model? Regarding the methodology, the work follows the research strategy of the case study. Both qualitative and quantitative data were collected from a variety of primary and secondary sources. Economic, social and environmental sustainability of the firm was assessed through financial and non-financial indicators; value-added generation and distribution were calculated from accounting data; and the circular business model was analysed via a thematic analysis: its components, innovation, enablers and barriers. Results show that the presence of barriers forces the implementation of circularity to be gradual and to combine linear and circular models to maintain competitiveness.

One of the core objectives of the European Green Deal in pursuing climate neutrality and sustainable development is the decarbonization of high-impact sectors. Among the most polluting is the fast fashion industry, driven by linear business models that must urgently transition to circular economy frameworks and decarbonized supply chains. Fast fashion poses significant environmental and social challenges due to its high greenhouse gas emissions, excessive resource consumption, and substantial waste generation. To foster greater sustainability within the sector, this study examines environmental indicators defined by the European Sustainability Reporting Standards (ESRS), in accordance with the EU’s Corporate Sustainability Reporting Directive (CSRD) 2022/2464. Aligned with the Global Reporting Initiative (GRI), these standards aim to harmonize sustainability disclosures and enable better decision-making across environmental, social, and governance (ESG) dimensions throughout Europe. This research focuses on five key environmental aspects—climate change, pollution, water resource management, biodiversity, and circular economy/resource use—across four leading fast fashion brands: Mango, Zara, H&M, and Shein. Using an exploratory web-based methodology, this study evaluates how these companies disclose and implement ESG strategies in their supply chains. The central aim is to assess the sustainability and resilience of their operations, with particular emphasis on communication strategies that support the transition from linear to circular business models. Ultimately, this study seeks to highlight both the progress and persistent challenges faced by the fast fashion industry in aligning with ESG and ESRS requirements.