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Environmental Social and Governance (ESG) Performance of Corporate Value in Different Periods

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  • Chengzhuo Zhang
  • Nik Hadiyan Binti Nik Azman

Abstract

The prevalence of COVID-19 offers companies the opportunity to adopt a more realistic approach to corporate social responsibility. This study examines the performance of ESG and corporate value under the COVID-19 scenario using panel data from 2018 to 2021. After collecting data from the Wind database, regression analysis was used to analyses the total ESG score, specific indicator scores and companies with various ratings. This study showed that sustainability - whether environmental (E), social (S) or governance (G) - contributes to enterprise value. It contributed to an increase in enterprise value for companies with high ratings, but had little impact on the enterprise value of companies with low ratings. In addition, the study was divided into two groups based on the duration of the pandemic to determine whether sustainability and firm value behaved differently under the influence of COVID-19. Even in the presence of COVID-19, the study found that the impact of sustainability on firm value was still favorable and significant. This study provides a detailed breakdown of ESG scores and regression analysis of individual indicators. Secondly a more detailed classification of companies was also carried out, with the study looking at companies according to different ratings, including AAA, AA, A, BBB, BB, B, CCC, CC, C.

Suggested Citation

  • Chengzhuo Zhang & Nik Hadiyan Binti Nik Azman, 2023. "Environmental Social and Governance (ESG) Performance of Corporate Value in Different Periods," Business Management and Strategy, Macrothink Institute, vol. 14(2), pages 85-108, December.
    • Handle: RePEc:mth:bmsmti:v:14:y:2023:i:2:p:85-108
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    References listed on IDEAS

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    1. Ho-Tan-Phat Phan & Francesco De Luca & Lea Iaia, 2020. "The “Walk” towards the UN Sustainable Development Goals: Does Mandated “Talk” through NonFinancial Disclosure Affect Companies’ Financial Performance?," Sustainability, MDPI, vol. 12(6), pages 1-20, March.
    2. 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.
    3. Taiyuan Wang & Pratima Bansal, 2012. "Social responsibility in new ventures: profiting from a long‐term orientation," Strategic Management Journal, Wiley Blackwell, vol. 33(10), pages 1135-1153, October.
    4. Amer Ait Sidhoum & Teresa Serra, 2018. "Corporate Sustainable Development. Revisiting the Relationship between Corporate Social Responsibility Dimensions," Sustainable Development, John Wiley & Sons, Ltd., vol. 26(4), pages 365-378, July.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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