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ESG Scores as Indicators of Green Business Strategies and Their Impact on Financial Performance in Tourism Services: Evidence from Worldwide Listed Firms

Author

Listed:
  • Chrysoula Matsali

    (Department of Tourism Management, University of West Attica, Egaleo Park Campus, GR-12243 Egaleo, Greece)

  • Michalis Skordoulis

    (Department of Tourism Management, University of West Attica, Egaleo Park Campus, GR-12243 Egaleo, Greece)

  • Aristidis Papagrigoriou

    (Department of Tourism Management, University of West Attica, Egaleo Park Campus, GR-12243 Egaleo, Greece)

  • Petros Kalantonis

    (Department of Tourism Management, University of West Attica, Egaleo Park Campus, GR-12243 Egaleo, Greece)

Abstract

The increasing integration of Environmental, Social, and Governance (ESG) practices into corporate strategy has raised important questions about their financial implications. This study examines the relationship between ESG performance and financial outcomes in the tourism industry, an industry that is both highly visible and environmentally sensitive. To achieve this, this study analyzes the impact of the three ESG dimensions on financial performance, measured by Return on Assets (ROA). Using panel data econometric techniques, this study examines a balanced panel dataset of 154 listed tourism services firms between 2017 and 2021 to assess how each ESG pillar influences profitability. ESG data were sourced from Refinitiv Eikon, a widely validated provider in ESG-financial research. The analysis employs panel data econometric techniques with firm size and leverage as control variables. Our findings indicate that the Environmental, Social, and Governance scores each have a statistically significant negative effect on ROA, while the ESG controversies score is not statistically significant. These results suggest that despite the reputational value of ESG engagement, its short-term financial impact may be limited or negative in capital-intensive service sectors, such as tourism. This study contributes to the literature by providing sector-specific, post-crisis empirical evidence and highlights the need for a nuanced understanding of ESG–financial dynamics across industries.

Suggested Citation

  • Chrysoula Matsali & Michalis Skordoulis & Aristidis Papagrigoriou & Petros Kalantonis, 2025. "ESG Scores as Indicators of Green Business Strategies and Their Impact on Financial Performance in Tourism Services: Evidence from Worldwide Listed Firms," Administrative Sciences, MDPI, vol. 15(6), pages 1-22, May.
    • Handle: RePEc:gam:jadmsc:v:15:y:2025:i:6:p:208-:d:1666083
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    References listed on IDEAS

    as
    1. Gunnar Friede & Timo Busch & Alexander Bassen, 2015. "ESG and financial performance: aggregated evidence from more than 2000 empirical studies," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 5(4), pages 210-233, October.
    2. Amal Aouadi & Sylvain Marsat, 2018. "Do ESG Controversies Matter for Firm Value? Evidence from International Data," Post-Print halshs-02007374, HAL.
    3. Amal Aouadi & Sylvain Marsat, 2018. "Do ESG Controversies Matter for Firm Value? Evidence from International Data," Journal of Business Ethics, Springer, vol. 151(4), pages 1027-1047, September.
    4. Tom Baum & Catherine Cheung & Haiyan Kong & Anna Kralj & Shelagh Mooney & Hải Nguyễn Thị Thanh & Sridar Ramachandran & Marinela Dropulić Ružić & May Ling Siow, 2016. "Sustainability and the Tourism and Hospitality Workforce: A Thematic Analysis," Sustainability, MDPI, vol. 8(8), pages 1-21, August.
    5. Gregor Dorfleitner & Christian Kreuzer & Christian Sparrer, 2020. "ESG controversies and controversial ESG: about silent saints and small sinners," Journal of Asset Management, Palgrave Macmillan, vol. 21(5), pages 393-412, September.
    6. Marco Taliento & Christian Favino & Antonio Netti, 2019. "Impact of Environmental, Social, and Governance Information on Economic Performance: Evidence of a Corporate ‘Sustainability Advantage’ from Europe," Sustainability, MDPI, vol. 11(6), pages 1-26, March.
    7. Paul C. Godfrey & Craig B. Merrill & Jared M. Hansen, 2009. "The relationship between corporate social responsibility and shareholder value: an empirical test of the risk management hypothesis," Strategic Management Journal, Wiley Blackwell, vol. 30(4), pages 425-445, April.
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