The ESG Reporting of EU Public Companies—Does the Company’s Capitalisation Matter?

Małgorzata Janicka and Artur Sajnóg
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Małgorzata Janicka: Department of International Finance and Investment, Faculty of Economics and Sociology, University of Lodz, Rewolucji 1905 Street 41, 90–255 Lodz, Poland
Artur Sajnóg: Department of International Finance and Investment, Faculty of Economics and Sociology, University of Lodz, Rewolucji 1905 Street 41, 90–255 Lodz, Poland

Sustainability, 2022, vol. 14, issue 7, 1-17

Abstract: Large companies in the European Union are required to publish information related to environmental, social and governance (ESG) matters. The aim of our study is to determine the quality of ESG reporting in EU public companies (measured by the ESG-index) and its effect on their market capitalisation. Therefore, the results of our research will be both scientific and applicative, and they will be useful for investors when making investment decisions on the stock exchange. The research includes over 15,000 companies listed on 27 stock exchanges (in the “old” and “new” member states, EU-14 and EU-13, respectively), covering the period 2002 to 2019. The data were obtained from the Refinitiv database. We drew three conclusions after the research. Firstly, only 50% of the companies listed on the stock exchanges in the old EU member states and merely 5% of the companies from the new EU member states had reported ESG-indexes in any year of the research period. Secondly, we found a positive relationship between a company’s market capitalisation and the quality of its ESG reports. Thirdly, the market values of companies are positively but not strongly affected by the ESG-indexes.

Keywords: sustainable finance; ESG; ESG reporting; market capitalisation; EU public companies (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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