 Detecting corporate ESG performance: The role of ESG materiality in corporate financial performance and risksSharon S. Yang, -Wei Huang, Hong-Yi Chen and Min-Hung Tsay The North American Journal of Economics and Finance, 2025, vol. 76, issue C Abstract: In line with the Sustainability Accounting Standards Board (SASB) guidelines, this study constructs SASB ESG Scores for firms and evaluates their influence on financial performance and risks. Empirical evidence shows a positive association between a firm’s SASB ESG Score and financial performance, along with a negative link to financial risks. In contrast, the ESG Disclosure Score fails to predict a firm’s financial performance and risks. Furthermore, the effect of the SASB ESG Score on profit is associated with higher market competitiveness and greater operational efficiency. On the other hand, the risk reduction is associated with the mitigation of stock price crash risks. The piecewise linear regression analysis suggests that superior SASB ESG Scores are linked to enhanced financial performance and reduced financial risks. We attribute the findings to the efficient allocation of resources toward ESG activities that hold material significance within a firm’s specific industry. Keywords: CSR; ESG disclosure score; Financial performance; Financial risk; Material issues; SASB ESG score (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:76:y:2025:i:c:s1062940825000105 DOI: 10.1016/j.najef.2025.102370 Access Statistics for this article The North American Journal of Economics and Finance is currently edited by Hamid Beladi More articles in The North American Journal of Economics and Finance from Elsevier |
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