IDEAS home Printed from https://ideas.repec.org/a/ahd/journl/v4y2023i7p49-59.html

The Relationship Between Sustainability Reporting and Corporate Performance. Evidence from the European Energy Sector

Author

Listed:
  • Pompei MITITEAN

    (Bucharest University of Economic Studies)

  • Nicoleta-Florina SĂRMAȘ

    (Bucharest University of Economic Studies)

Abstract

This article examines the relationship between corporate sustainability, as measured by the combined environmental, social and governance (ESG) and individual scores, and corporate performance of companies operating in the European energy sector. Due to the new EU regulation, companies must adopt strategies regarding environmental, social and governance activities, elaborating an integrated report that shows investors how they are involved in social issues and environmental concerns. This study is based on a quantitative research method which involves using an econometric model and running a multiple linear regression. The data used was collected from the Thomson Reuters Eikon database and covers the period 2017-2021. The identified results are mixed. There is a positive, but statistically insignificant relationship between ESG, ENV, SOC and ROA, while there is a negative and significant relationship between GOV and ROA at the 0.05 level. ENV and SOC scores have a strong negative and significant impact on ROE, and ESG and GOV do not show a significant relationship with it. Additionally, ESG has a significant positive impact on Tobin’s Q ratio, and ENV and SOC have a significant positive impact on it. This research can help investors and other stakeholders have an overview of the energy sector in which they can direct their investment strategies.

Suggested Citation

  • Pompei MITITEAN & Nicoleta-Florina SĂRMAȘ, 2023. "The Relationship Between Sustainability Reporting and Corporate Performance. Evidence from the European Energy Sector," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 4(7), pages 49-59, July.
    • Handle: RePEc:ahd:journl:v:4:y:2023:i:7:p:49-59
    DOI: 10.37945/cbr.2023.07.06
    as

    Download full text from publisher

    File URL: https://www.ceccarbusinessreview.ro/the-relationship-between-sustainability-reporting-and-corporate-performance-evidence-from-the-european-energy-sector-a322d/download-PDF/
    Download Restriction: no
    File URL: https://www.ceccarbusinessreview.ro/the-relationship-between-sustainability-reporting-and-corporate-performance-evidence-from-the-european-energy-sector-a322a/abstract/
    Download Restriction: no
    File URL: https://libkey.io/10.37945/cbr.2023.07.06?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Abhishek Behl & P. S. Raghu Kumari & Harnesh Makhija & Dipasha Sharma, 2022. "Exploring the relationship of ESG score and firm value using cross-lagged panel analyses: case of the Indian energy sector," Annals of Operations Research, Springer, vol. 313(1), pages 231-256, June.
    2. Chen, Zhongfei & Xie, Guanxia, 2022. "ESG disclosure and financial performance: Moderating role of ESG investors," International Review of Financial Analysis, Elsevier, vol. 83(C).
    3. Michał Baran & Aneta Kuźniarska & Zbigniew J. Makieła & Anna Sławik & Magdalena M. Stuss, 2022. "Does ESG Reporting Relate to Corporate Financial Performance in the Context of the Energy Sector Transformation? Evidence from Poland," Energies, MDPI, vol. 15(2), pages 1-22, January.
    4. Yoo, Sunbin & Managi, Shunsuke, 2022. "Disclosure or action: Evaluating ESG behavior towards financial performance," Finance Research Letters, Elsevier, vol. 44(C).
    5. Yaghoub Abdi & Xiaoni Li & Xavier Càmara-Turull, 2020. "Impact of Sustainability on Firm Value and Financial Performance in the Air Transport Industry," Sustainability, MDPI, vol. 12(23), pages 1-23, November.
    6. Preeti Sharma & Priyanka Panday & R. C. Dangwal, 2020. "Determinants of environmental, social and corporate governance (ESG) disclosure: a study of Indian companies," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 17(4), pages 208-217, December.
    7. Pompei Mititean, 2022. "The Impact Of Corporate Governance Characteristics On Companies’ Financial Performance: Evidence From Romania," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(233), pages 113-134, April – J.
    8. Changhong Zhao & Yu Guo & Jiahai Yuan & Mengya Wu & Daiyu Li & Yiou Zhou & Jiangang Kang, 2018. "ESG and Corporate Financial Performance: Empirical Evidence from China’s Listed Power Generation Companies," Sustainability, MDPI, vol. 10(8), pages 1-18, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ajithakumari Vijayappan Nair Biju & Sreelekshmi Geetha & Salu Prasad & Aghila Sasidharan & Ambili Jayachandran, 2025. "ESG‐Firm Performance Nexus: Evidence From an Emerging Economy," Business Strategy and the Environment, Wiley Blackwell, vol. 34(3), pages 3469-3496, March.
    2. Dunbar, Kwamie & Treku, Daniel & Sarnie, Robert & Hoover, Jack, 2023. "What does ESG risk premia tell us about mutual fund sustainability levels: A difference-in-differences analysis," Finance Research Letters, Elsevier, vol. 57(C).
    3. Hu, Siyang & Zhang, Chongyan, 2025. "ESG disclosure quality, supply chain resilience, and corporate performance," Finance Research Letters, Elsevier, vol. 85(PE).
    4. Lien, Donald & Wang, Lie-Huey, 2025. "ESG peer spillover effect in supply chain: Evidence from Taiwan semiconductor industry," International Review of Economics & Finance, Elsevier, vol. 100(C).
    5. Theerasak Nitlarp & Supaporn Kiattisin, 2022. "The Impact Factors of Industry 4.0 on ESG in the Energy Sector," Sustainability, MDPI, vol. 14(15), pages 1-19, July.
    6. M. Kouzez & J. Y. Lee & J. Mahfod-Leroux, 2024. "Investment in ESG activities and bank performance: does bank ownership matter?," Post-Print hal-03859287, HAL.
    7. Chai, Shanglei & Cao, Mengjun & Li, Qiang & Ji, Qiang & Liu, Zuankuo, 2023. "Exploring the nexus between ESG disclosure and corporate sustainable growth: Moderating role of media attention," Finance Research Letters, Elsevier, vol. 58(PC).
    8. Elen Cristina Bravos Giupponi & Maximilian Espuny & Camila Fabrício Poltronieri & Otávio José de Oliveira, 2026. "From ESG to Sustainable Development: A Path Designed for the Triple Helix Spheres," Sustainable Development, John Wiley & Sons, Ltd., vol. 34(2), pages 1622-1647, April.
    9. Erli Dan & Jianfei Shen & Yiwei Guo, 2023. "Corporate Sustainable Growth, Carbon Performance, and Voluntary Carbon Information Disclosure: New Panel Data Evidence for Chinese Listed Companies," Sustainability, MDPI, vol. 15(5), pages 1-27, March.
    10. Thi Ngan Pham & Phung Phi Tran & Minh-Hieu Le & Hoang Nhi Vo & Cong Dat Pham & Hai-Dang Nguyen, 2022. "The Effects of ESG Combined Score on Business Performance of Enterprises in the Transportation Industry," Sustainability, MDPI, vol. 14(14), pages 1-17, July.
    11. Caterina Lucarelli & Sabrina Severini, 2024. "Anatomy of the chimera: Environmental, Social, and Governance ratings beyond the myth," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4198-4217, July.
    12. Gawęda, Adrian, 2025. "Does environmental, social, and governance performance elevate firm value? International evidence," Finance Research Letters, Elsevier, vol. 73(C).
    13. Mohammed W. A. Saleh & Zaharaddeen Salisu Maigoshi, 2025. "The nexus of ESG and environmental sustainability: Does gender diversity make a difference in Asian companies?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(6), pages 13793-13813, June.
    14. Nan Wu & Boqiang Lin, 2026. "Green information disclosure and shareholding preferences of institutional investors: the case of China," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 12(1), pages 1-32, December.
    15. Yanqi Sun & Jingtong Wu & Tairan Kevin Huang & Howard Davey & Yuzhong Lu, 2026. "Is ESG Transparency the Fruit of Corporate Digitalization: Strategic Pathways to Enhanced ESG Disclosure?," Business Strategy and the Environment, Wiley Blackwell, vol. 35(3), pages 3923-3951, March.
    16. Sakhr Bani-Khaled & Graça Azevedo & Jonas Oliveira, 2025. "Environmental, social, and governance (ESG) factors and firm value: A systematic literature review of theories and empirical evidence," AMS Review, Springer;Academy of Marketing Science, vol. 15(1), pages 228-260, June.
    17. Mohy-ud-Din, Kamran, 2024. "ESG reporting, corporate green innovation and interaction role of board diversity: A new insight from US," Innovation and Green Development, Elsevier, vol. 3(4).
    18. Hyun-Jung Nam & Mehmet Huseyin Bilgin & Doojin Ryu, 2024. "Firm value, ownership structure, and strategic approaches to ESG activities," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 14(1), pages 187-226, March.
    19. Hamzeh Al Amosh & Saleh F. A. Khatib & Husam Ananzeh, 2024. "Terrorist attacks and environmental social and governance performance: Evidence from cross‐country panel data," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 210-223, January.
    20. Hanan Qudah, 2026. "Tracing the development of environmental, social and governance (ESG) performs: a systematic review and bibliometric analysis," Future Business Journal, Springer, vol. 12(1), pages 1-20, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ahd:journl:v:4:y:2023:i:7:p:49-59. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Radu CIOBANU (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.