The involvement of the Spanish industrial sector in environmental sustainability and its impact on productivity

In recent years, developed economies have become aware of the importance of respecting the environment in the economic development of countries. As it is reflected in Sustainable Development Goals (SDGs) 8 and 9 of the 2030 United Nations' Agenda which promote sustainable growth and environmentally friendly industrialisation. Environmental impacts are more visible in the industrial sector than in all other productive sectors. In the case of Spain, 55.66% of companies in this industrial sector consider it important to invest in R&D with the aim of reducing such environmental impacts. This paper shows that the pursuit of this objective constitutes a fundamental element in the innovative process and describes its consequences on the productivity of industrial companies. Estimates of the relationships between R&D investment, innovation, and productivity were established using a CDM structural model applied to a sample of Spanish industrial companies included in the Technological Innovation Panel database. The results obtained confirm that business involvement in the reduction of environmental impact has positive and statistically significant effects on the decision to invest in R&D and the amount of effort involved, on the probability of conducting innovative activities, and on productivity, showing that productivity is 6.5% higher in industrial companies that attempt to reduce environmental impacts than in those that do not.