The DOI matches its Crossref record; 17 of the 17 references it cites were found in a registry or an index.
Understanding the Impact of ESG Practices in Corporate Finance
Open accessAbstract
This study examines the relationship between environmental, social, and governance (ESG) factors and corporate financial performance. Specifically, we study various individual ESG categories, both ESG strengths and concerns, and aggregate ESG factor and their impact on corporate financial performance including profitability and financial risk. We find a positive effect of ESG factors on corporate profitability, and the effect is more pronounced for larger firms. Among different ESG categories, corporate governance has the most significant impact, particularly for firms with weak governance. We also find that ESG variables generally have a positive influence on credit rating. In particular, the social factor has the most significant impact on credit rating, while environmental score surprisingly has a negative effect. Overall, this research provides a rationale for ESG integration in the context of investment management and portfolio construction to maximize value and minimize risk.
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Citations
Cites
Corporate Governance and Equity Prices
Gompers, P., Ishii, J., & Metrick, A. (2003) · The Quarterly Journal of Economics · doi:10.1162/00335530360535162 · Cited by 6,120
ESG and financial performance: aggregated evidence from more than 2000 empirical studies
Friede, G., Busch, T., & Bassen, A. (2015) · Journal of Sustainable Finance & Investment · doi:10.1080/20430795.2015.1118917 · Cited by 4,631
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Corporate goodness and shareholder wealth
Krüger, P. (2015) · Journal of Financial Economics · doi:10.1016/j.jfineco.2014.09.008 · Cited by 1,901
Corporate Governance, Accounting Outcomes, and Organizational Performance
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The impact of environmental, social, and governance disclosure on firm value: The role of CEO power
Li, Y., Gong, M., Zhang, X.-Y., & Koh, L. (2018) · The British Accounting Review · doi:10.1016/j.bar.2017.09.007 · Cited by 1,139
The Eco-Efficiency Premium Puzzle
Derwall, J., Guenster, N., Bauer, R., & Koedijk, K. (2005) · Financial Analysts Journal · doi:10.2469/faj.v61.n2.2716 · Cited by 965
Sensitive industries produce better ESG performance: Evidence from emerging markets
Garcia, A. S., Mendes-Da-Silva, W., & Orsato, R. J. (2017) · Journal of Cleaner Production · doi:10.1016/j.jclepro.2017.02.180 · Cited by 896
Corporate Social Responsibility and Credit Ratings
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From the Stockholder to the Stakeholder: How Sustainability Can Drive Financial Outperformance
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Research works printed but not linked: 1
- Dunbar, C.G., Li, Z.F., and Shi, Y. (2021, March 01). Corporate Social (Ir)responsibility and Firm Risk: The Role of Corporate Governance. Available online: https://ssrn.com/abstract=3791594. · doi:10.2139/ssrn.3791594
Cited by
Chen, S., Song, Y., & Gao, P. (2023) · Journal of Environmental Management · doi:10.1016/j.jenvman.2023.118829 · Cited by 789
Li, J., Lian, G., & Xu, A. (2023) · Journal of Business Research · doi:10.1016/j.jbusres.2023.113648 · Cited by 423
How does boardroom diversity influence the relationship between ESG and firm financial performance?
Wu, Z., Gao, J., Luo, C., Xu, H., & Shi, G. (2024) · International Review of Economics & Finance · doi:10.1016/j.iref.2023.10.045 · Cited by 115
A New Direction in Human Resources Management and ESG: Transforming Business Models
Sklavos, G., Theodossiou, G., Papanikolaou, Z., Karelakis, C., & Lazarides, T. (2024) · Advances in Human Resources Management and Organizational Development · doi:10.4018/979-8-3693-5981-5.ch014 · Cited by 5
Metadata
- Authors
- Kim, S., & Li, Z. (.
- Venue
- Sustainability
- Publisher
- MDPI AG
- Published
- 2021-03-27
- Volume
- 13
- Issue
- 7
- Pages
- 3746
- ISSN
- 2071-1050 (ISSN-L)
- OpenAlex
- W3147154088
- Cited by
- 389
- References
- 17
- FWCI
- 51.79
- Type
- journal article
- Language
- en
- Open access
- gold
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Data sources
Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
