ESG integration and cost of capital: Microsoft's sustainable finance transformation

Pamela Tinashe Bakare
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Pamela Tinashe Bakare: Hubei University of Technology, China

Journal of Accounting, Finance, Economics, and Social Sciences, 2025, vol. 10, issue 2, 33-46

Abstract: Purpose: This study examines the relationship between Environmental, Social, and Governance (ESG) integration and the cost of capital for Microsoft Corporation from 2015 to 2025, analyzing how comprehensive sustainability initiatives influence borrowing costs, credit ratings, and investor valuations. Methodology: Employing a mixed-methods longitudinal case study design, this research combines quantitative analysis of financial metrics (bond yields, credit spreads, cost of debt) with qualitative thematic analysis of ESG initiatives. Secondary data sources include Microsoft's annual reports (2015-2025), sustainability disclosures, credit rating reports, and market data from Bloomberg and Refinitiv databases. Findings: Microsoft's ESG integration strategy correlates strongly with favorable cost of capital outcomes, including maintenance of AAA credit ratings across all major agencies, bond yields approaching Treasury rates (spread compression to 8 basis points), and statistically significant negative correlations (r = -0.82, p

Keywords: ESG integration; cost of capital; sustainable finance; Microsoft Corporation; credit ratings (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:euj:jafess:v:10:y:2025:i:2:id:119

DOI: 10.62458/jafess1023bpt

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