Effect of ESG-scores on the Financial Performance of companies from Sensitive Industries.
Author
Akib, Ashadul Al
Term
4. semester
Publication year
2024
Submitted on
2024-06-02
Pages
64
Abstract
This thesis examines whether ESG scores are linked to financial performance in four ESG-sensitive S&P 500 industries: energy, industrials, healthcare, and automotive. Addressing a gap in prior work that often aggregates across sectors, the study focuses on industries subject to high ESG scrutiny. Using secondary data from Refinitiv Eikon for 2013-2022, it applies regression analysis with return on equity (ROE), net margin, and operating margin as performance measures. The results show very weak positive associations between ESG scores and the financial ratios, while the ESG–ROE relationship is statistically insignificant. Overall, the findings do not support a firm conclusion about a clear connection between ESG scores and financial performance in these industries over the study period, and suggest that multiple factors may influence the relationship. The thesis contributes an industry-specific perspective and highlights directions for further research.
Denne afhandling undersøger, om ESG-scorer hænger sammen med den finansielle performance i fire ESG-følsomme brancher i S&P 500: energi, industri, sundhed og automotive. Studien adresserer et hul i litteraturen, hvor mange tidligere analyser har set bredt på tværs af sektorer, ved at fokusere på udvalgte brancher med høj ESG-eksponering. Med sekundære data fra Refinitiv Eikon for perioden 2013-2022 anvendes regressionsanalyse, hvor finansiel performance måles ved afkast på egenkapital (ROE), nettomargin og driftsmargin. Resultaterne viser meget svage positive sammenhænge mellem ESG-scorer og finansielle nøgletal, mens relationen mellem ROE og ESG-score er statistisk insignifikant. Samlet set tyder fundene på, at der ikke kan drages en fast konklusion om en klar forbindelse mellem ESG-scorer og finansiel performance i disse brancher over den undersøgte periode, og at flere forhold kan påvirke sammenhængen. Afhandlingen bidrager med et branchespecifikt perspektiv og peger på behovet for yderligere forskning.
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Keywords