Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
Series Vol. 49 , 01 December 2023
Open
Access | Article
How Does ESG Performance Affect Firm Value
* Author to whom correspondence should be addressed.
Abstract
With an increasing number of companies applying ESG-related activities, many researchers have recently focused on what effects could be brought to the firm’s value by the firm ESG performance. Researchers have two main views on this relationship. One view is that the ESG performance and disclosure of nonfinancial reports play an important role in improving a firm’s value and sustainable development. The other view is that ESG performance is not only meaningless for a firm’s value but also harmful to the firm’s value, especially for firms in developing countries. But firms they used for testing the relationship may belong to different industrial fields. So the firms used in this article would belong to the technology, energy, and finance fields To avoid the essential distinctions between different firms that belong to different industrial fields. After analyzing the MSCI EGS ratings history data over the last five years or since records began and the stock prices during the corresponding periods for these three industries respectively, the benefits on a firm’s value brought by the better ESG performance tend to be more obvious in the technology and finance industries than the firms in the energy industries.
Keywords
ESG performance, ESG rating, firm value, stock prices
References
1. Boffo, R. and Patalano, R. (2020) ESG Investing: Practices, Progress, and Challenges. OECD Paris. Retrieved from www.oecd.org/finance/ESG-Investing-Practices-Progress-and-Challenges.pdf
2. Albertini, E. (2013) Does Environmental Management Improve Financial Performance? A Meta-Analytical Review. Organization & Environment, 26, 431–457.
3. Garcia, A.S. and Orsato, R.J. (2020) Testing the Institutional Difference Hypothesis: A Study About Environmental, Social, Governance, and Financial Performance. Bus Strat Env, 29, 3261–3272.
4. Xu, Z. (2022) Research on the Impact of ESG Performance on Corporate Value. Advances in Applied Mathematics, 11, 4313-4322.
5. Erhart, S. (2022) Take It with a Pinch of Salt-ESG Rating of Stocks and Stock Indices. International Review of Financial Analysis, 83, 102308.
6. Wong, W.C., Batten, J.A., Ahmad, A.H., Mohamed-Arshad, S.B., Nordin, S. and Adzis, A.A. (2021) Does ESG certification add firm value?. Finance Research Letters, 39, 101593.
7. Egorova, A.A., Grishunin, S.V. and Karminsky, A.M. (2022) The Impact of ESG factors on the performance of Information Technology Companies, Procedia Computer Science, 199, 339-345.
8. Jorgenson, D.W. and Weitzman, M.L., et al. (2023) NVIDIA Stock Price: A Leading Indicator of Semiconductor Demand. AC Investment Research Journal, 220.
9. Norouzi, N. (2021) Post-COVID-19 and Globalization of Oil and Natural Gas Trade: Challenges, Opportunities, Lessons, Regulations, and Strategies. Int J Energy Res, 45, 14338–14356.
10. Parihar, S.B. (2022) Investment Analysis of JP Morgan Chase & Co. Diss. Rashtrasant Tukadoji Maharaj Nagpur University.
Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License. Authors who publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open Access Instruction).
- Volume Title
- Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
- ISBN (Print)
- 978-1-83558-145-2
- ISBN (Online)
- 978-1-83558-146-9
- Published Date
- 01 December 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/49/20230473
- Copyright
- 01 December 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited