Are Controversies an Opportunity to Achieve Profitability? The Healthcare Sector Observation

Abstract

Starting with climate changes, followed by the pandemic period and conflicts between states, companies have been encouraged to align their strategies to ensure business continuity. In addition to these tumultuous periods, sustainability reporting has often remained a relatively voluntary practice in many states. During the pandemic, newspapers highlighted numerous instances of corruption in the healthcare sector, highlighting concerns about how well companies were addressing community needs. This study aims to analyse the impact of controversies on the profitability of the healthcare sector companies and assess the opportunities that arise from reporting them. To investigate this, a sample of 1323 listed healthcare companies was used, and a quantitative analysis was conducted through statistical and econometric methods. Data were gathered from the Refinitiv Eikon Database covering the period 2020-2022 and included sustainability indicators such as ESG Controversies and ESG scores. ROA (Return on Assets) was used as the key profitability indicator. The study’s findings reveal that there are no significant opportunities aligned tied to controversies in the healthcare sector during crisis periods. Contrary, controversies negatively impacted the profitability of listed healthcare companies during crisis periods. The novelty of the study is reflected in the analysis of the ESG controversies indicator associated with the profitability of the healthcare sector during crisis periods.