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Financial state and investment attractiveness of Russian public companies: The effect of ESG factors

Author

Listed:
  • Irina S. Belik

    (Ural Federal University, Ekaterinburg, Russia)

  • Anton S. Dutsinin

    (AO Tekhnologii doveriya – Audit, Ekaterinburg, Russia)

  • Natalia L. Nikulina

    (Institute of Economics of the Ural Branch of the RAS, Ekaterinburg, Russia)

Abstract

In the last decade, the ESG (environmental, social, governance) paradigm has been actively developing in commercial organization management and investment decision-making. The article examines the impact of ESG factors on the financial state and investment attractiveness of Russian public companies. The concepts of sustainable development and corporate governance constitute the theoretical framework of the research. To analyze the impact of ESG factors on the financial state and investment attractiveness of Russian public companies, we used multiple linear regression models using the least squares method. The empirical evidence is data on 80 organizations from RAEX ESG Ranking of Russian companies based on reports for 2020. A statistically significant positive relationship was found between EBITDA and return on assets, dividend yield, cash flows and ESG factors, as well as a statistically significant negative relationship was found between the price/earnings multiplier, beta coefficient and ESG factors. The study demonstrates that there is a mixed statistically significant relationship between the indicator of financial leverage and ESG factors. At that, ESG factors, which are positioned as necessary and having a positive influence on companies’ activities, can threaten both their financial state and investment attractiveness. Further ESG research imply a more detailed study of the model for assessing the impact of ESG factors on a company’s financial performance and the possibility of integrating financial and non-financial reporting standards.

Suggested Citation

  • Irina S. Belik & Anton S. Dutsinin & Natalia L. Nikulina, 2022. "Financial state and investment attractiveness of Russian public companies: The effect of ESG factors," Upravlenets, Ural State University of Economics, vol. 13(6), pages 44-55, January.
    • Handle: RePEc:url:upravl:v:13:y:2022:i:6:p:44-55
    DOI: 10.29141/2218-5003-2022-13-6-4
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    References listed on IDEAS

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    1. Bela S. Bataeva & Aglaya D. Kokurina & Nikita A. Karpov, 2021. "The impact of ESG reporting on the financial performance of Russian public companies," Upravlenets, Ural State University of Economics, vol. 12(6), pages 20-32, October.
    2. Gregory, Richard Paul, 2022. "ESG activities and firm cash flow," Global Finance Journal, Elsevier, vol. 52(C).
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