<p>ESG and its Relationship to the Financial Performance of the most Capitalizable U.S. Companies</p>

Abstract

In the face of the climate crisis that global society is currently facing, it is necessary to apply mechanisms that guarantee sustainable development and, moreover, that contemplate sustainable finance and corporate responsibility. One of the reference frameworks to achieve this is the Environmental, Social and Corporate Governance (ESG) criteria, which show the performance of companies in the areas of sustainability. However, investment decisions linked to improving ESG indicators represent a dilemma for companies in terms of their financial profitability. Still, there are discrepancies in how ESG indicators affect the financial performance of companies, for this reason, this paper aims to analyze in Bloomberg® US 1000 companies, the incidence of ESG scores with the financial performance of the company through ROA and Tobin Q. A longitudinal study was conducted covering the period from 2015 to 2022, for the analysis of results, an econometric regression model for panel data was used. The results show a positive and statistically significant impact on the financial performance of companies and ESG, being higher in ROA (t=6.74) and in the case of Tobin Q (t=5.19). The work represents an advance in the literature on the relationship between ESG criteria and corporate financial performance with a broad list of companies with the largest market capitalization in the US market, however, future research is needed for emerging markets or controlling for economic sector.