A SECTORAL-BASED APPROACH TO THE LINK BETWEEN FINANCIAL PERFORMANCE AND SUSTAINABILITY

Radu-Alexandru Șerban, Diana Marieta Mihaiu, Mihaela Herciu () and Claudia Ogrean
Additional contact information
Radu-Alexandru Șerban: Lucian Blaga University of Sibiu, Romania
Diana Marieta Mihaiu: Lucian Blaga University of Sibiu, Romania

Studies in Business and Economics, 2023, vol. 18, issue 1, 367-377

Abstract: The main objective of this paper is to analyze if there is a link between financial performance and sustainability in the case of listed companies on stock markets, worldwide, and across all sectors of activity because sustainability has become an important part of the company’s strategy. The financial performance of the companies was calculated using public financial data from the annual financial statements, while the environmental, social, and governance (ESG), and controversies scores were used as performance metrics for sustainability at company level. To evaluate financial performance a variety of indicators were used, such as assets management, debt management or market value performance, as a benchmark tool to compare the standing of companies in each sector of activity analyzed. Our findings showed that there are different relations (strong or weak) between financial performance and sustainability if a sectoral-based approach is considered. As a result, the link between financial performance and sustainability was tested on a sample of more than 5,000 companies divided into 10 sectors of activities, according to the Global Industry Classification Standard (GICS), for the period 2017-2021. The main conclusion of this study is that they are interrelated, capitalizing on each other.

Keywords: Financial Performance; ESG Controversies Score; Environmental Pillars; Z-Score Function; Sector of Activity (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://magazines.ulbsibiu.ro/eccsf/RePEc/blg/journl/18120serban.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:blg:journl:v:18:y:2023:i:1:p:367-377

Access Statistics for this article

More articles in Studies in Business and Economics from Lucian Blaga University of Sibiu, Faculty of Economic Sciences Lucian Blaga University of Sibiu, Faculty of Economic Sciences Dumbravii Avenue, No 17, postal code 550324, Sibiu, Romania. Contact information at EDIRC.
Bibliographic data for series maintained by Mihaela Herciu ().