Sustainable Finance and Corporate Performance: A Dynamic Panel Analysis of New York Stock Exchange Firms

The incorporation of environmental, social, and governance (ESG) concerns into corporate finance has accelerated globally; nevertheless, empirical data about its effects in the U.S. context is still scarce. This research examines the impact of sustainable financing on the financial performance of non-financial enterprises listed on the New York Stock Exchange (NYSE) from 2008 to 2024. This study used the stakeholder theory and other theories to analyze four aspects of sustainable finance: green financing efforts, emission reduction strategies, sustainable product initiatives, and environmental investment initiatives. The study implemented a dynamic panel regression model with the two-step Generalized Method of Moments (GMM) to mitigate endogeneity and omit variable bias. The findings indicate that green finance, emission reduction strategies, and sustainable product efforts have a positive and significant impact on Return on Assets (ROA) and Return on Net Operating Assets (RNOA), demonstrating their effectiveness in enhancing financial performance. Conversely, environmental investment programs exhibited a strong and negative correlation with financial success, indicating immediate cost implications. These findings emphasize the significance of strategic planning in sustainability investments and reinforce the necessity for legislative incentives to assist enterprises throughout the transition. This study enhances the literature by providing U.S.-specific, component-level insights into the financial implications of sustainable financing, therefore offering pragmatic counsel for managers, investors, and regulators.