The Influence of Environmental, Social, and Governance (ESG) Disclosure on Firm Financial Performance

Almeyda, Raisa; Darmansya, Asep

doi:10.12962/j23546026.y2019i5.6340

Cited by 79 publications

(70 citation statements)

References 38 publications

(34 reference statements)

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“…The model provided a high level of independence and control variables' ability to forecast dependent variable because Adjust R square and R square were 38.30, and 40.20 percent. The finding of a positive influence of environmental disclosure on firm value was consistent with Jagannathan et al (2017), Almeyda andDarmansyah (2019), andYoon et al (2018). This is because investors were interested in the risk of the environment in the era of social media and supporting positive corporate conduct activities for the environment.…”

Section: Resultssupporting

confidence: 72%

The Influence of ESG Disclosures on Firm Value in Thailand

Yordudom

Suttipun

2020

GCBSS Proc.

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Although corporate financial performance is important in economic perspective, companies have to focus on environment, social, and governance responsibilties. This is because if the companies aim only profit without people and planet responsibilities, they will not accept all stakeholders' demands. Therefore, financial performance is not enough for needs of stakeholder groups. In Thailand, the Stock Exchange of Thailand (SET) has adopted environmental, social, and governance (ESG) disclosures to classify listed companies as Thailand Sustainable Investment (THSI). It is showed that croporate sustainability can create long-term investment rather than short-term investment. In addition, the environment, social, and governance disclosures allow the companies to develop more efficiency business and if the companies have transparency and quality of internal management, the corporations will reduce the risk of fraud, cost of training new employees as well as increase the quality and productivity of the products per employee (Association of Thai Securities Companies, 2018) There are fews prior related studied in Thailand investigated and examined influence of environment, social, and governance disclosures on firm value. Moreover, the literatures have provided conflicting results of the influence of environmental, social, and goverment disclosures on firm value. Keywords: ESG Disclosures; Firm value; THSI; Thailand

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Section: Resultssupporting

confidence: 72%

The Influence of ESG Disclosures on Firm Value in Thailand

Yordudom

Suttipun

2020

GCBSS Proc.

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“…The scarce focus on the firm performance tested through accounting-based measures, together with the lack of alignment of the results, is apparent even in more extensive studies covering several years of data. For instance, in their work covering five years of panel data from G7 countries, Almeyda and Darmansya [29] highlight the correlation between ESG disclosure and firm performance measured through ROA and ROC (significant correlation), as well as between ESG disclosure and market value measured through stock price and price-to-earnings ratio (no significant correlation); moreover, while they do look at the individual pillars, the environmental pillar appears to have a positive relationship with both ROC and stock price, while the social and the governance factors do not appear to have a significant relationship. Similarly, an extensive study of the Eurostoxx50 index covering 9 years, focuses on market value, confirming the absence of a relationship between companies' market value and their ESG efforts [30], a conclusion mirrored by an analysis of Italian listed companies [31].…”

Section: Literature Reviewmentioning

confidence: 99%

Does ESG Disclosure Influence Firm Performance?

et al. 2022

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This study aims to analyze the impact of the environmental, social, and governance (ESG) disclosure on the firm performance, given the stakeholders’ increasing attention to the firm’s ESG practices. Looking at the European context, the Directive 2014/95/EU and its update encouraged European large companies to provide disclosure about their socially responsible practices. Acting within the Agency and Signaling theory frameworks, this paper focuses on the Italian situation where the Legislative Decree 254/2016 implemented the European Directive and forced the largest firms (those with more than 500 employees) to disclose comprehensive information about their social and environmental activities starting from 2017. By applying a panel regression analysis, using a sample of the largest Italian listed companies, and considering a time span of 10 years (from 2011 to 2020), this study finds that there is a positive relationship between environmental, social, and governance disclosure and firm performance, measured by EBIT. Our findings will help firms’ stakeholders, decision-makers, policymakers, as well as academics, to improve their awareness of the impact of ESG disclosure on the performance of the firm, both as a comprehensive factor and individually by pillar. The findings, which support the positive relationship between ESG disclosure and firm performance, should incentivize managers to invest in CSR practices.

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“…Conclusion-It has been determined that the ESG scores do not have a statistically significant effect on the financial performance of companies in the airline industry, only that there is a statistically significant relationship between the ESG overall score and return on assets (ROA). These results reached in the study Minutolo et al (2019), Velte (2017), and Almeyda and Darmansya (2019. In summary, the results show that the ESG scores calculated for companies in the airline industry do not affect the financial performance of companies, while airline sector investors do not take their ESG scores into consideration.…”

mentioning

confidence: 68%

Effect of ESG data on the financial performance of companies: a study on the airline sector

Şişman¹,

Çankaya²

2020

Pressacademia

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Purpose-In recent years, financial markets around the world have faced environmental, social and governance (ESG) factors as one of the tools of investment decision-making. Therefore, ESG scores stand out as an area of increasing interest for researchers in the financial world. In the study, firstly, studies in the literature related to ESG data were examined in order to prepare the theoretical background. In the reviewed literature, there is no study conducted in the airline sector regarding the effect of ESG data on financial performance. For this reason, the airline sector was chosen to differentiate from the studies reviewed in the literature. In this study, it is aimed to test the effect of the ESG scores calculated for companies in the airline industry on the financial performance of companies. Methodology-Which variables were used in studies conducted to test the relationship between ESG data and financial performance in the literature. In the studies reviewed, ESG General Score and ESG individual scores such as environmental (E), social (S) and governance (G) are used as independent variables, while return on assets (ROA), return on equity (ROE) and Tobin's It has been determined that rates such as Q are used. After the variables were determined, the data set to be used in the study was prepared. All airline companies in the world were determined as the universe, and 26 airline companies whose ESG data and financial data were accessed between 2010-2017, when a balanced panel data set was the longest and largest, were included in the study. The data of the companies subject to research were obtained from Thomson Reuters Eikon Data Terminal and made ready for analysis. Panel regression model was used as the analysis method in the study. Findings-The stationarity of the series was examined by performing panel unit root tests, which is one of the assumptions to be provided in panel data models. The series are stabilized by taking the difference in non-stationary series. Then, in the study, which panel of 6 different models created to measure the effect of the ESG overall score and the environmental (E), social (S) and governance (G) scores used individually on return on equity (ROE), return on assets (ROA) and Tobin's Q ratios. Hausman Test was conducted to determine that it will be tested using the model. In line with the results of the Hausman Test, while random effects model was used in five models, fixed effects model was used in one model. To test the effect of ESG scores on financial performance, a statistically significant effect in models using Environmental (E), social (S) and governance (G) scores and financial performance indicators such as return on assets (ROA), return on equity (ROE) and Tobin's Q variables While no relationship could be determined, in the model established with the ESG Overall Score, it was concluded that there was only a statistically significant effect on Return on Assets (ROA). Conclusion-It has been determined that the ESG scores do not have a statistically significant effe...

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The Influence of Environmental, Social, and Governance (ESG) Disclosure on Firm Financial Performance

Cited by 79 publications

References 38 publications

The Influence of ESG Disclosures on Firm Value in Thailand

The Influence of ESG Disclosures on Firm Value in Thailand

Does ESG Disclosure Influence Firm Performance?

Effect of ESG data on the financial performance of companies: a study on the airline sector

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