Analysis of the Impact of ESG on Financial Performance
DOI:
https://doi.org/10.54097/cfd3f519Keywords:
ESG; financial performance; PE; EPS.Abstract
With the development of the economy and society, the relationship between enterprises and the environment has received widespread attention. In the context of the deeply rooted concept of sustainable development, the relationship between ESG and corporate financial performance has become a focus of current financial research. Therefore, this article collected relevant data on the S&P 500 index and ESG for in-depth research. Specifically, financial data includes stock returns, P/E ratios, and earnings per share, while ESG data includes ESG risk ratings and ESG controversies. The empirical results indicate that, firstly, there is no significant correlation between ESG performance and returns; Secondly, there is a significant negative correlation between ESG and PE and EPS. The relevant results of this study have played a certain auxiliary role in deepening the understanding of the relationship between ESG and corporate financial performance.
Downloads
References
GOND, Jean-Pascal; PIANI, Valeria. Enabling institutional investors’ collective action: The role of the principles for responsible investment initiative. Business & Society, 2013, 52(1): 64-104.
Dincer, H., Yüksel, S. Management strategies to survive in a competitive environment. 2021. Available at https://link.springer.com/book/10.1007/978-3-030-72288-3
Ortas, E., M. Moneva, J., Álvarez, I. Sustainable supply chain and company performance. Supply Chain Management: An International Journal, 2014, 19(3): 332–350.
KAMWARO, Ezekiel K. The impact of investment portfolio choice on financial performance of investment companies in Kenya. 2013. PhD Thesis. University of Nairobi. Available at http://erepository.uonbi.ac.ke/handle/11295/59573.
Ernst, H., Hoyer, W. D., Krafft, M., Krieger, K. Customer relationship management and company performance—the mediating role of new product performance. Journal of the Academy of Marketing Science, 2011, 39(2): 290–306.
Dugar, P. S&P 500 ESG Risk Ratings. 2023. doi:10.34740/KAGGLE/DS/366020.
Fama, E. F. Random walks in stock market prices. Financial Analysts Journal, 1995, 51(1): 75–80.
Wu, W. T. The P/E Ratio and Profitability. Journal of Business & Economics Research, 2013, 12(1): 67.
Islam, M., Tahsan. How Earning Per Share (EPS) effects on Share Price and Firm Value. European Journal of Business and Management, 2014, (6).
Gillian, T. Republican Targeting of Esg Laws Is Bad For business. Financial Times, 2022.
Wet, J. de. Earnings per share as a measure of financial performance: Does it obscure more than it reveals? Corporate Ownership and Control, 2013, 10(4).
Downloads
Published
Issue
Section
License
Copyright (c) 2024 Highlights in Science, Engineering and Technology
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
