The role of ESG in high-pollution industries: implications for market and financial performance
业务
金融体系
污染
财务
经济
生态学
生物
作者
Απόστολος Δασίλας,Goran Karanović
出处
期刊:The Journal of Risk Finance [Emerald Publishing Limited] 日期:2025-04-01
标识
DOI:10.1108/jrf-08-2024-0249
摘要
Purpose Using data from 49 USA energy and raw material companies listed in the S&P 500 in the period 2011–2021, this study aims to investigate the impact of the quality of environmental, social and governance (ESG) disclosure on market and financial performance as measured by Tobin’s Q and return on assets, respectively. Design/methodology/approach This study uses panel data regression analysis that accounts for firm- and time-fixed effects to examine the impact of ESG on market and financial performance in high-pollution industries. Findings This study finds that the quality of ESG disclosure is positively related to stock market performance. Among the three components of ESG, the quality of corporate governance disclosure has the strongest impact on firm market performance. Practical implications The results suggest that the quality of ESG disclosure has a heterogeneous impact on the market performance and profitability of USA energy and raw material firms. While a good ESG score can improve stock market performance, potentially attracting public investment and improving capital structure, this requires high levels of capital investment that might deprive other essential company operations of resources. Originality/value This is the first study that examines the impact of ESG disclosure quality on market and financial performance in high-pollution industries. Moreover, this study enriches the existing knowledge by applying dynamic panel data regression analysis in the ESG disclosure–financial performance relationship.