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The Impact of ESG Factors on the Firm Performance

In: Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025)

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  • Yueyuan Yang

    (Beijing Jiaotong University, School of Economics and Management)

Abstract

In the evolving global business environment, this paper examines the impact of ESG on enterprises. Primarily, this paper introduces the background of ESG development in the changing business environment. This paper mainly discusses from four aspects. First, ESG rating plays a key role in shaping investors’ expectations. Secondly, from the perspective of risk management, effective risk management can minimize the negative impact, thereby enhancing the company’s reputation and ensuring long-term profitability. Thirdly, integrating ESG into a long-term strategy is critical. This can enhance the overall strength of the company and align investor expectations with consumer demand. However, over-investing in ESG can lead to undesirable consequences such as increased financial burdens and ESG inequality, which can damage a company’s reputation and growth prospects. In conclusion, while ESG has a profound impact on all aspects of business operations, companies should balance sustainability with cost-effectiveness when implementing ESG strategies to achieve long-term stability and create value for society.

Suggested Citation

  • Yueyuan Yang, 2025. "The Impact of ESG Factors on the Firm Performance," Advances in Economics, Business and Management Research, in: Maizaitulaidawati Md Husin (ed.), Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025), pages 938-945, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-748-9_102
    DOI: 10.2991/978-94-6463-748-9_102
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