Detecting corporate ESG performance: The role of ESG materiality in corporate financial performance and risks

IF 3.8 3区经济学 Q1 BUSINESS, FINANCE

North American Journal of Economics and Finance Pub Date : 2025-01-01 DOI:10.1016/j.najef.2025.102370

Sharon S. Yang , Jr-Wei Huang , Hong-Yi Chen , Min-Hung Tsay

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引用次数: 0

Abstract

In line with the Sustainability Accounting Standards Board (SASB) guidelines, this study constructs SASB ESG Scores for firms and evaluates their influence on financial performance and risks. Empirical evidence shows a positive association between a firm’s SASB ESG Score and financial performance, along with a negative link to financial risks. In contrast, the ESG Disclosure Score fails to predict a firm’s financial performance and risks. Furthermore, the effect of the SASB ESG Score on profit is associated with higher market competitiveness and greater operational efficiency. On the other hand, the risk reduction is associated with the mitigation of stock price crash risks. The piecewise linear regression analysis suggests that superior SASB ESG Scores are linked to enhanced financial performance and reduced financial risks. We attribute the findings to the efficient allocation of resources toward ESG activities that hold material significance within a firm’s specific industry.

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来源期刊

North American Journal of Economics and Finance Multiple-

CiteScore

7.30

自引率

8.30%

发文量

168

期刊介绍： The focus of the North-American Journal of Economics and Finance is on the economics of integration of goods, services, financial markets, at both regional and global levels with the role of economic policy in that process playing an important role. Both theoretical and empirical papers are welcome. Empirical and policy-related papers that rely on data and the experiences of countries outside North America are also welcome. Papers should offer concrete lessons about the ongoing process of globalization, or policy implications about how governments, domestic or international institutions, can improve the coordination of their activities. Empirical analysis should be capable of replication. Authors of accepted papers will be encouraged to supply data and computer programs.