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The impact of environmental, social and governance policies on companies’ financial and economic performance: A comprehensive approach and new empirical evidence

Author

Listed:
  • Gratiela Georgiana Noja

    (West University of Timisoara)

  • Bianca Raluca Baditoiu

    (West University of Timisoara)

  • Alexandru Buglea

    (West University of Timisoara)

  • Valentin Partenie Munteanu

    (West University of Timisoara)

  • Diana Corina Gligor Cimpoieru

    (West University of Timisoara)

Abstract

In the last decade, the use of integrated reports (IR) comprising information on non-financial indicators from the environment, social, and governance (ESG) category has increased in time. Companies are now focusing not only on financial reporting but are notably including non-financial issues in their public reports. In doing so, they seek to align activities with the expectations of their stakeholders and the society in which they operate, as well as with various regulations, which are increasingly relevant worldwide. This study examines the impact of ESG reporting on company performance. Our research involved analyzing financial and non-financial data from 2,400 companies extracted from the Refinitiv Eikon database. Two methods of quantitative analysis were applied, namely multiple linear regression models processed by the robust regression method and structural equation modelling. Main findings entail that ESG indicators had strong and medium effects on company performance, but these effects varied across different dimensions, requiring a tailored approach to embed ESG factors in corporate strategy to enhance overall performance. Our paper provides a new perspective on the current and the potential impact of ESG reporting, based on systematic theoretical and empirical analyse , with multiple implications for business administration and management.

Suggested Citation

  • Gratiela Georgiana Noja & Bianca Raluca Baditoiu & Alexandru Buglea & Valentin Partenie Munteanu & Diana Corina Gligor Cimpoieru, 2024. "The impact of environmental, social and governance policies on companies’ financial and economic performance: A comprehensive approach and new empirical evidence," E&M Economics and Management, Technical University of Liberec, Faculty of Economics, vol. 27(1), pages 121-144, March.
    • Handle: RePEc:bbl:journl:v:27:y:2024:i:1:p:121-144
    DOI: 10.15240/tul/001/2024-1-008
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    References listed on IDEAS

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    More about this item

    Keywords

    ESG indicators; performance; corporate governance; environment; econometric modelling;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • 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

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