Abstract

The energy trilemma is a significant challenge of our time, driven by advancing climate change, social and political changes, and the impact of the war in Ukraine. This has led to the traditional business models of the energy industry and utilities being challenged. Against the backdrop of environmental sustainability, energy security, and affordability, this paper examines whether German utilities can achieve greater sustainability while creating shareholder value by divesting their carbon-intensive businesses. The analysis of the spin-off of E.ON-Uniper and the carve-out of RWE-Innogy reveals positive impacts on shareholder value, corporate performance, and a higher share price of all four companies after the splits. One conclusion that can be drawn is that divesting carbon-intensive businesses might create value for the company and its shareholders. However, it is important to note that the analysis did not demonstrate any benefits in terms of improved ESG ratings due to divestment.

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