Analysis of the Impact of ESG on Financial Performance

Abstract

With the development of the economy and society, the relationship between enterprises and the environment has received widespread attention. In the context of the deeply rooted concept of sustainable development, the relationship between ESG and corporate financial performance has become a focus of current financial research. Therefore, this article collected relevant data on the S&P 500 index and ESG for in-depth research. Specifically, financial data includes stock returns, P/E ratios, and earnings per share, while ESG data includes ESG risk ratings and ESG controversies. The empirical results indicate that, firstly, there is no significant correlation between ESG performance and returns; Secondly, there is a significant negative correlation between ESG and PE and EPS. The relevant results of this study have played a certain auxiliary role in deepening the understanding of the relationship between ESG and corporate financial performance.