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The Impact of ESG Controversies on the Market Value in the Energy Sector

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  • Özlem Sayılır
  • Muhammed Aslam Chelery Komath
  • İbrahim Karaaslan

Abstract

The energy sector has relatively higher exposure to controversial publicity due to the nature of industry operations. For this reason, this study focuses on the energy sector and aims to evaluate the impact of ESG controversies scores (Environmental Controversies, Social Controversies and Governance Controversies) of LSEG (former Refinitiv EIKON) database on market value of firms. We investigate the relationship between ESG controversies and the market value of 393 firms in 2018-2022 using Dynamic Panel Data Regression Models. The findings of the study, carried out with system GMM, reveal that the market value of firms in the previous period has had a statistically significant positive effect on the market value of firms in the current period. There is a positive and statistically significant relationship between market value and governance controversies. Yet, no statistically significant relationship was detected between market value and environmental controversies (CE), or market value and social controversies.

Suggested Citation

  • Özlem Sayılır & Muhammed Aslam Chelery Komath & İbrahim Karaaslan, 2025. "The Impact of ESG Controversies on the Market Value in the Energy Sector," Journal of Research in Economics, Politics & Finance, Ersan ERSOY, vol. 10(SI), pages 305-317.
    • Handle: RePEc:ahs:journl:v:10:y:2025:i:si:p:305-317
    DOI: 10.30784/epfad.1697801
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    References listed on IDEAS

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    Keywords

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    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
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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