How Does ESG Performance Affect Firm Value

Ruiqian Wang

doi:10.54254/2754-1169/49/20230473

Research Article

Open access

Published on 1 December 2023

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Wang,R. (2023). How Does ESG Performance Affect Firm Value. Advances in Economics, Management and Political Sciences,49,26-33.

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How Does ESG Performance Affect Firm Value

Ruiqian Wang *^,1,

¹ Krieger School of Arts and Sciences, Johns Hopkins University, Washington DC 20036, the United States

* Author to whom correspondence should be addressed.

https://doi.org/10.54254/2754-1169/49/20230473

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

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References

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Cite this article

Wang,R. (2023). How Does ESG Performance Affect Firm Value. Advances in Economics, Management and Political Sciences,49,26-33.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of the 2nd International Conference on Financial Technology and Business Analysis

Conference website: https://www.icftba.org/

ISBN：978-1-83558-145-2(Print) / 978-1-83558-146-9(Online)

Conference date: 8 November 2023

Editor：Javier Cifuentes-Faura

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.49

ISSN：2754-1169(Print) / 2754-1177(Online)

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