Work

Do Environmental, Social, and Governance (ESG) Factors Matter? Analyzing the Relationships Between Firm Characteristics and ESG Scores

Year: 2024

Type: article

Abstract: We used three different databases that cover different years from 2006 through 2023 that provide different insights into the associations of firm features with their E, S, and G scores, as well as the composite ESG score. We find that large market capitalization firms are associated with higher ESG and environmental scores as well as with ESG-related strengths. These associations likely stem from the increased scrutiny and expectations from investors, regulators, and the public for large-cap firms. However, we find that changes in ESG scores have no significant associations with changes in basic firm characteristics—market cap, growth options, or profitability. That is, changes in ESG scores over time do not seem to significantly enhance or alter these basic features of a firm.

Source: Businesses

DOI: 10.3390/businesses4040034

Authors: C. N. V. Krishnan, Jiemin Yang, Xiyao Tan

Institution: Case Western Reserve University

Language: English

Topic: Corporate Social Responsibility Reporting

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: gold

Estimated APC paid: $1,137

Funder: University of Pennsylvania