Is ESG the key to unlock debt financing during the COVID-19 pandemic? International evidence

Srivastava, Jagriti; Sampath, Aravind; Gopalakrishnan, Balagopal

doi:10.1016/j.frl.2022.103125

Cited by 14 publications

(3 citation statements)

References 36 publications

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“…Conversely, when firms display sound ESG performance, their willingness to disclose information is stronger. Explicitly, ESG disclosure is a non-financial disclosure, which can systematically reflect the actual state of enterprise development, and provide creditors such as banks and investors with more information related to the enterprise, in order to ensure that the corporation maintains a strong and transparent association with the stakeholders [40]. In particular, a transparent connection with stakeholders is conducive to reducing information asymmetry, making it convenient for business firms to acquire external financing and alleviate the issue of corporate financial constraints.…”

Section: Moderating Effect Of Financial Constraints On Esg Performanc...mentioning

confidence: 99%

The Effect of Environmental, Social, and Governance (ESG) Performance on Corporate Financial Performance in China: Based on the Perspective of Innovation and Financial Constraints

Xu,

Zhu

2024

Sustainability

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This paper analyzes the effects of Environmental, Social, and Governance (ESG) performance on corporate financial performance (CFP), enriching the research on the intrinsic mechanism between ESG and financial performance in developing countries. This study uses a data sample of A-share listed companies in Shanghai and Shenzhen, China from 2009 to 2021, and adopts a two-way fixed effects model research methodology with fixed time and industries to explore the relationship and intrinsic mechanism between the two in conjunction with relevant basic theories. The study findings indicate that ESG performance exerts a positive influence on CFP by fostering corporate innovation. Corporations with good ESG performance in the long term may be more conducive to good CFP. When corporations face financial constraints, the role of ESG performance in enhancing CFP weakens. Heterogeneity analyses indicate that ESG performance contributes more to the CFP of non-state-owned enterprises (non-SOEs). The negative moderating influence of financial constraints is more pronounced in non-SOEs. Additionally, ESG performance promotes the improvement of CFP in non-heavy polluting corporates. This research study extends a scientific foundation for how corporates can improve CFP and increase market competitiveness.

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Section: Moderating Effect Of Financial Constraints On Esg Performanc...mentioning

confidence: 99%

The Effect of Environmental, Social, and Governance (ESG) Performance on Corporate Financial Performance in China: Based on the Perspective of Innovation and Financial Constraints

Xu,

Zhu

2024

Sustainability

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“…Hal ini menyebabkan terjadinya penurunan permintaan pasar, kesulitan pasokan bahan baku, dan kebijakan lockdown yang menghambat aktivitas perusahaan. Sebagai akibatnya, perusahaan manufaktur mengalami tekanan keuangan dan harus mencari sumber dana yang cukup untuk tetap beroperasi (Srivastava et al, 2022).…”

Section: Iunclassified

Analisis Perbandingan Laba Menggunakan Ekuitas dan Hutang Perusahaan Manufaktur pada Masa Pandemi

Hermanto,

Farha,

Saniyah

et al. 2023

Manajemen Bisnis

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Many companies experienced losses during the coronavirus disease 2019 pandemic. This research aims to analyze differences in company profit levels using debt and equity funding of manufacturing companies in the basic and chemical industry sectors, the miscellaneous industry sector, and the consumer goods industry sector listed on the Indonesia Stock Exchange. The data collection technique used was documentation with 160 samples. The method used in this research is a descriptive statistical analysis of the company's financial reports in 2020 using the independent sample t-test difference analysis method. The research results show that companies that use equity funding sources have greater profits than companies that use debt funding sources, meaning that companies during the pandemic should use equity funding sources. The results of this research can be a reference for manufacturing companies to choose the most appropriate funding source according to their financial needs and the risks they face.

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“…According to Weber et al (2010), a company's engagement in sustainable activities increases its creditworthiness. Empirical research conducted by Srivastava et al (2022), revealed that increased engagement in CSR activities enable companies to access debt capital during the COVID-19--induced crisis. Cheema-Fox et al (2021, p. 32) investigating companies' resilience and response to the COVID-19 pandemic, indicated that a two-standard deviation increase in the ESG rating by MSCI was associated with about 1.2% higher stock returns (by contrast, the ESG rating from Sustainalytics was not significant).…”

Section: Esg Efforts and Enterprise Resiliencementioning

confidence: 99%

Strong ESG Risk Management as a Way to Improve Organisational Resilience in Times of Crisis: An Analysis of WIG-ESG Index Constituents

Dzyuma-Zaremba¹

2023

Financial Sciences

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During the last decade sustainable investment practices have evolved significantly. ESG reporting is moving seamlessly from voluntary to mandatory. By investing in companies that score high in ESG rankings, investors hope for the organisation’s resilience to the crisis and higher returns. Due to the dynamic development of socially responsible investing both in Poland and worldwide, new indices using ESG screening criteria are being designed, which in turn are the underlying instrument for structured products. The aim of the study was to analyse the constituents of the newly created WIG-ESG index and to discuss its performance and organisational resilience in relation to ESG risk exposure and management. The research showed that the criteria for inclusion in the WIG- -ESG index should be amended to recognise companies that care about strong ESG risk management and exclude those with negligible ESG efforts. The second important issue is eligibility for inclusion. If all companies are eligible to be included in the index (ESG testing as a condition for inclusion), this will reduce the rotation of the index’s constituents and allow the relation between a company’s ESG score after each update and its long-term performance to be explored.

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Is ESG the key to unlock debt financing during the COVID-19 pandemic? International evidence

Cited by 14 publications

References 36 publications

The Effect of Environmental, Social, and Governance (ESG) Performance on Corporate Financial Performance in China: Based on the Perspective of Innovation and Financial Constraints

The Effect of Environmental, Social, and Governance (ESG) Performance on Corporate Financial Performance in China: Based on the Perspective of Innovation and Financial Constraints

Analisis Perbandingan Laba Menggunakan Ekuitas dan Hutang Perusahaan Manufaktur pada Masa Pandemi

Strong ESG Risk Management as a Way to Improve Organisational Resilience in Times of Crisis: An Analysis of WIG-ESG Index Constituents

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