The impact of ESG controversies on the financial performance of firms: An analysis of industry and country clusters

IF 6.3 2区经济学 Q1 BUSINESS, FINANCE

Borsa Istanbul Review Pub Date : 2024-08-05 DOI:10.1016/j.bir.2024.08.001

Michele Nascimento Jucá, Polona Domadenik Muren, Aljoša Valentinčič, Riste Ichev

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引用次数: 0

Abstract

Stakeholders have become increasingly interested in sustainable practices, leading to intense investigation in the literature of their effects on companies' returns. However, not much information is available about the effect of environmental, social, and governance (ESG) controversy on companies' financial performance. Inappropriate social behavior and environmental scandals attract attention in the media and, consequently, among investors. Therefore, this study analyzes the impact of ESG controversy on companies' return on equity, identifying differences between companies that operate in different clusters such as environmentally sensitive industries (ESI) or non–environmentally sensitive industries and emerging/developed countries. To this end, we investigate 625 publicly owned companies for the period 2011 to 2022, using a four-dimensional hierarchical linear regression model, comprising time, firms, industries, and countries. ESG controversies negatively impact the financial performance of companies operating in ESI and developed countries.

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环境、社会和公司治理争议对公司财务业绩的影响：行业和国家集群分析

利益相关者对可持续发展实践的兴趣与日俱增，从而导致文献中对其对公司回报影响的深入研究。然而，关于环境、社会和治理（ESG）争议对公司财务业绩影响的信息却不多。不当的社会行为和环境丑闻会引起媒体的关注，进而引起投资者的关注。因此，本研究分析了环境、社会和治理争议对公司股本回报率的影响，并确定了在环境敏感行业（ESI）或非环境敏感行业以及新兴国家/发达国家等不同集群中运营的公司之间的差异。为此，我们使用一个由时间、公司、行业和国家组成的四维分层线性回归模型，对 2011 年至 2022 年期间的 625 家上市公司进行了调查。ESG争议对在ESI和发达国家运营的公司的财务业绩产生了负面影响。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Borsa Istanbul Review Multiple-

CiteScore

7.60

自引率

3.80%

发文量

130

审稿时长

26 days

期刊介绍： Peer Review under the responsibility of Borsa İstanbul Anonim Sirketi. Borsa İstanbul Review provides a scholarly platform for empirical financial studies including but not limited to financial markets and institutions, financial economics, investor behavior, financial centers and market structures, corporate finance, recent economic and financial trends. Micro and macro data applications and comparative studies are welcome. Country coverage includes advanced, emerging and developing economies. In particular, we would like to publish empirical papers with significant policy implications and encourage submissions in the following areas: Research Topics: • Investments and Portfolio Management • Behavioral Finance • Financial Markets and Institutions • Market Microstructure • Islamic Finance • Financial Risk Management • Valuation • Capital Markets Governance • Financial Regulations