Nexus between sustainability management and financial performance - study on manufacturing firms from global emerging market

Abstract

The objective of this study is to identify and analyse the causal relationship between a firm's sustainability management practices and its financial performance in global emerging economies. This study includes Granger causality and regression analysis of panel data of seven years for 119 manufacturing firms on environment, social and governance (ESG) indicators and measures for financial performance, i.e., ROA, ROE, price to book value and debt equity ratio. Through this study, we found that ESG factors hurt the financial performance of firms, but the vice-versa is may not true. Implications and future research have been suggested based on our observations.