Reporting on ESG information becomes an important corporate practice in every industry. Signatories to the UN Principles for Responsible Investment commit to incorporate ESG issues into their investment analysis and ownership policies. Bloomberg terminals integrated ESG data in 2010, and thus increased the diffusion of ESG information. Moreover, as of 2016, more than 100 rating agencies provided ESG data, including large data providers such as Thomson Reuters and MSCI. However, theoretical debates about an impact of ESG information disclosure on financial performance are contraversial. In addition, empirical research connecting individual ESG factors with financial results, is scant.
Therefore, this research aims to explore the impact of ESG information disclosure on financial results based on the data of top 50 largest companies according to Forbes list.
An evaluation by using content analysis and scoring system methods, correlation and regression analysis are used to present original empirical evidence from top 50 largest companies according to Forbes list.
Project funding:
Project is funded by EU Structural Funds according to the 2014–2020 Operational Programme for the European Union Funds’ Investments priority “Development of scientific competence of researchers, other researchers, students through practical scientific activities” under Measure No. 09.3.3-LMT-K-712.
Project results:
The preliminary findings show that higher environmental and social information disclosures lead to better financial results, while governance information does not impact any financial result. Investments in CSR have also a positive impact on financial results. Correlation analysis show that disclosing more environmental and governance KPIs (key performance indicators) would improve financial performance, while regression reveal that the disclosure of the number of ESG indicators and investment in CSR activities might contribute to revenue growth.
Period of project implementation: 2019-10-15 - 2020-04-30
Project coordinator: Kaunas University of Technology
