Climate-related financial risk and business resilience under the green transition: evidence from Central and Eastern European EU Economies

Abstract

The green transition affects firms through energy exposure, regulatory adjustment and changing conditions for business continuity. This article examines the relationship between climate-related transition exposure and business resilience in eleven Central and Eastern European EU economies over 2012–2020. Business resilience is measured through enterprise survival, enterprise death rates and a composite Business Resilience Index (BRI) based on Eurostat business-demography indicators. Transition exposure is captured through energy import dependency, renewable-energy progress and a Transition Exposure Index (TEI). The empirical strategy uses country and year fixed-effects models with lagged explanatory variables, complemented by country-level diagnostics and robustness checks. The results show that transition exposure is not uniformly associated with weaker business resilience. TEI-based specifications indicate a positive association with enterprise survival and BRI, while component-based estimates show mixed effects, including a negative association between renewable-energy share and BRI. Governance quality does not significantly moderate the transition–resilience relationship. The findings suggest that climate-related transition exposure operates through country-specific structural channels rather than through a simple vulnerability mechanism.