Impacts of Sustainability on Financing Dynamics: Analysis of Trade Debt and Other Debt in European Firms.

The analysis of the impact of sustainability practices on corporate finance is becoming increasingly important in the sustainable transition and today's economic and financial environment. Through the application of a panel regression model, this study examines the relationship between ESG (Environmental, Social, Governance) sustainability indices (scores) and the ability to obtain trade debt and other debts by European firms. Particular attention is paid to the effects of environmental and social sustainability scores and the contribution of environmental innovation, as measured by scores, on trade credit volume. The results show a positive and statistically significant connection between sustainability scores and the use of trade credit. They also underscore the important role of environmental innovation. It was also observed that other debts are most influenced by the environmental impact. As a result, this research contributes to the academic debate and provides new insights into the interaction between sustainability and financial decisions in the European context and along the Supply Chain.