ESG Rating and Market Valuation of the Firm: Sector Approach

Abstract

The main aim of the study was to assess the impact of the ESG rating of the company on its market valuation. The research sample included stock companies of real economy sectors of financial markets of European Union Member States in years 2018-2020. The research hypothesis stated that across financial markets of European Union there are sectors in which there is a strong and positive correlation between high ESG rating of the company and its market value. The paper analysed selected measures of descriptive statistics of used variables, Pearson correlation coefficient, and constructed an Ordinary Least Squared model assessing the impact of ESG rating on the surveyed companies’ market value. Both the composites of ESG rating (ESG and ESGC) and the individual components (E, S, G and C) were analysed. Financial data and ESG ratings were extracted from Refinitiv Eikon database. Undertaken research proved ESG disclosure and rating to be the determinant of the companies market value in specific sectors, while companies controversies appeared to be the destructors of market value of companies across all sectors. Undertaken study adds new insights to the debate on the relation between companies ESG and financial performance by applying sector approach to the analysis.

The Cost Reduction Analysis of Green Hydrogen Production from Coal Mine Underground Water for Circular Economy

“…For such assumptions, the investment 25 percentage points lower than previously expected for this variant would be sufficient [49,50]. Reducing expenditure only slightly reduced the expenditure return period [22,51,52]. However, it should be taken into account that such an action would involve the risk of potential loss of the project's energy independence after a possible further increase in energy prices.…”

Navigating the impact: A comprehensive analysis of ESG disclosure consequences through systematic review

“…In addition to definitions and measurements that affect the results between ESG and performance, the country where the sample is located, the firm size (Shalhoob & Hussainey, 2022), the industry in which it is located (Atayah et al, 2023; Conca et al, 2021; Gawęda, 2022; Gholami et al, 2022; Wang et al, 2022; Wong & Zhang, 2022) all affect this relationship. In particular, the positive relationship between ESG disclosure and firms' sustainable growth is especially pronounced in non‐environmentally sensitive industries and when uncertainty about the external environment increases.…”

Hydrogen Storage and Combustion for Blackout Protection of Mine Water Pumping Stations

“…It was planned to sell oxygen wholesale on the local market for 60% of its retail value. Revenues generated from the sale of treated water and oxygen, as well as thermal energy, will be used to purchase the missing portion of electricity, again reducing the need for a budget subsidy [30,48]. The conceptual diagram of the decision options for upgrading the pumping station is shown in Figure 1.…”

“…In order to protect the pumping station from the "blackout" phenomenon, it is assumed that a hydrogen reserve will be permanently stored in the hydrogen tanks to ensure, independent of external power supply, continuous operation of the cogeneration engines for 5 days. The generated electricity and heat will be consumed for own use, and the surplus heat energy can be given to the local operator's district heating network for a fee [30,53].…”

“…An additional problem is the emission of greenhouse gases into the atmosphere during barium desalination [28,29]. All of these conditions are compounded by the threat of blackout [30,31]. Mine water pumping stations have some retention, and a short-term blackout would not significantly affect safety risks.…”