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Does ESG Reporting Relate to Corporate Financial Performance in the Context of the Energy Sector Transformation? Evidence from Poland

Author

Listed:
  • Michał Baran

    (Institute of Economics, Finance and Management, Jagiellonian University, 31-007 Kraków, Poland)

  • Aneta Kuźniarska

    (Institute of Economics, Finance and Management, Jagiellonian University, 31-007 Kraków, Poland)

  • Zbigniew J. Makieła

    (Department of Management, WSB University, 41-300 Dąbrowa Górnicza, Poland)

  • Anna Sławik

    (Institute of Economics, Finance and Management, Jagiellonian University, 31-007 Kraków, Poland)

  • Magdalena M. Stuss

    (Institute of Economics, Finance and Management, Jagiellonian University, 31-007 Kraków, Poland)

Abstract

This paper aims to investigate whether the environmental, social and corporate governance (ESG) score of companies operating in the energy sector is associated with their corporate financial performance (CFP). The research covered data from eight companies with a dominant position in the Polish energy sector. The research used the comparative analysis between ESG performance and accounting-based measures of profitability: return on equity (ROE), return on assets (ROA) and return on sales (ROS). Additionally, reference was also made to the DuPont model. The acquired results do not reveal repetitive dependencies that would facilitate the discovery of a pattern of the impact of the factors of ESG on the financial performance of enterprises. Despite indicating the cases of correlations between the ESG scores and CFP at a high level, indeed sometimes at a very high level, the particular case studies significantly differ from each other. This may be caused by the fact that Polish enterprises from the energy sector illustrate far-reaching specifics, among others, with regard to the key significance of the entities with a prevalent state ownership and strict administrative regulations, which are subject to the energy market, state of development and structure of the whole sector in Poland. Thus, this is also why the mechanisms or dependencies, whose existence it is possible to expect in conditions of free competition, may be weakened or even eliminated in Polish conditions.

Suggested Citation

  • 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.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:2:p:477-:d:721633
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    Citations

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    Cited by:

    1. Dariusz Kusz & Iwona Bąk & Beata Szczecińska & Ludwik Wicki & Bożena Kusz, 2022. "Determinants of Return-on-Equity (ROE) of Biogas Plants Operating in Poland," Energies, MDPI, vol. 16(1), pages 1-22, December.
    2. 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.
    3. Hanna E. Czaja-Cieszyńska & Dominika Kordela, 2023. "Sustainability Reporting in Energy Companies—Is There a Link between Social Disclosures, the Experience and Market Value?," Energies, MDPI, vol. 16(9), pages 1-15, April.
    4. Piotr F. Borowski, 2022. "Management of Energy Enterprises in Zero-Emission Conditions: Bamboo as an Innovative Biomass for the Production of Green Energy by Power Plants," Energies, MDPI, vol. 15(5), pages 1-16, March.
    5. ȘERBAN Radu-Alexandru & MIHAIU Diana Marieta & HERCIU Mihaela & OGREAN Claudia, 2023. "A Sectoral-Based Approach To The Link Between Financial Performance And Sustainability," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 18(1), pages 367-377, April.
    6. Pankaewta Lakkanawanit & Wilawan Dungtripop & Muttanachai Suttipun & Hisham Madi, 2022. "Energy Conservation and Firm Performance in Thailand: Comparison between Energy-Intensive and Non-Energy-Intensive Industries," Energies, MDPI, vol. 15(20), pages 1-17, October.
    7. Li, Biqing & Amin, Azka & Nureen, Naila & Saqib, Najia & Wang, LingYan & Rehman, Mubeen Abdur, 2024. "Assessing factors influencing renewable energy deployment and the role of natural resources in MENA countries," Resources Policy, Elsevier, vol. 88(C).
    8. Marcin Łuszczyk & Krzysztof Malik & Barbara Siuta-Tokarska & Agnieszka Thier, 2023. "Direction of Changes in the Settlements for Prosumers of Photovoltaic Micro-Installations: The Example of Poland as the Economy in Transition in the European Union," Energies, MDPI, vol. 16(7), pages 1-16, April.
    9. Mantas Svazas & Yuriy Bilan & Valentinas Navickas & Małgorzata Okręglicka, 2023. "Energy Transformation in Municipal Areas—Key Datasets and Their Influence on Process Evaluation," Energies, MDPI, vol. 16(17), pages 1-20, August.
    10. Ariana Chang & Tian‐Shyug Lee & Hsiu‐Mei Lee, 2024. "Applying sustainable development goals in financial forecasting using machine learning techniques," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 2277-2289, May.
    11. Theerasak Nitlarp & Theeraya Mayakul, 2023. "The Implications of Triple Transformation on ESG in the Energy Sector: Fuzzy-Set Qualitative Comparative Analysis (fsQCA) and Structural Equation Modeling (SEM) Findings," Energies, MDPI, vol. 16(5), pages 1-26, February.
    12. Jarosław Kaczmarek, 2022. "The Balance of Outlays and Effects of Restructuring Hard Coal Mining Companies in Terms of Energy Policy of Poland PEP 2040," Energies, MDPI, vol. 15(5), pages 1-30, March.
    13. Vezeteu Cosmin-Dănuț & Stănciulescu Raluca-Ioana, 2024. "ESG Risks and Financial Performance. Analysis of Romanian-Listed Companies," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 18(1), pages 2196-2210.
    14. Mariusz Zieliński & Małgorzata Adamska, 2022. "ESG Assessment from the Perspective of the Management Board and Trade Unions on the Example of the Opole Power Plant," Energies, MDPI, vol. 15(21), pages 1-21, October.
    15. 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.
    16. 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.
    17. Ioana Simona Ermiṣ & Victor-Emanuel Ciuciuc, 2022. "Environmental, Social and Corporate Governance and firms’ financial performance: A semi-structured literature review, through the lens of sustainable development," Nowoczesne Systemy Zarządzania. Modern Management Systems, Military University of Technology, Faculty of Security, Logistics and Management, Institute of Organization and Management, issue 4, pages 13-36.
    18. Liyuan Meng & Yuchen Zhang, 2023. "Impact of Tax Administration on ESG Performance—A Quasi-Natural Experiment Based on China’s Golden Tax Project III," Sustainability, MDPI, vol. 15(14), pages 1-23, July.
    19. Jarosław Kaczmarek & Konrad Kolegowicz & Wojciech Szymla, 2022. "Restructuring of the Coal Mining Industry and the Challenges of Energy Transition in Poland (1990–2020)," Energies, MDPI, vol. 15(10), pages 1-48, May.

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