ǂThe ǂimpact of ESG controversies on the financial performance of firms

ǂan ǂanalysis of industry and country clusters

Michele Nascimento Jucá (Author), Polona Domadenik (Author), Aljoša Valentinčič (Author), Riste Ichev (Author)

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.

Keywords

poslovanje podjetja;trajnostni razvoj;cilji trajnostnega razvoja;company performance;sustainable development;sustainable development goals;

Data

Language:	English
Year of publishing:	2024
Typology:	1.01 - Original Scientific Article
Organization:	UL EF - Faculty of Economics
UDC:	502.131.1
COBISS:	204478211
ISSN:	2214-8450
Views:	130
Downloads:	38
Average score:	0 (0 votes)
Metadata:

Other data

Secondary language:	Slovenian
Secondary keywords:	poslovanje podjetja;trajnostni razvoj;cilji trajnostnega razvoja;
Type (COBISS):	Article
Pages:	str. 1305-1315
Volume:	ǂVol. ǂ24
Issue:	ǂIss. ǂ6
Chronology:	Nov. 2024
DOI:	10.1016/j.bir.2024.08.001
ID:	26796202