Impact of Sustainability Reporting and Inadequate Management of ESG Factors on Corporate Performance and Sustainable Growth

Camelia Oprean-Stan, Ionica Oncioiu, Iulia Iuga and Sebastian Stan
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Ionica Oncioiu: Faculty of Finance-Banking, Accountancy and Business Administration, Titu Maiorescu University, 040051 Bucharest, Romania
Sebastian Stan: Faculty of Military Management, Nicolae Balcescu Land Forces Academy, 550170 Sibiu, Romania

Sustainability, 2020, vol. 12, issue 20, 1-31

Abstract: The purpose of this research study is to examine and explain whether there is a positive or negative linear relationship between sustainability reporting, inadequate management of economic, social, and governance (ESG) factors, and corporate performance and sustainable growth. The financial and market performances of companies are both analyzed in this study. Sustainable growth at the company level is introduced as a dimension that depends on sustainability reporting and the management of ESG factors. In order to achieve the main objective of the paper, the methodology here focuses on the construction of multifactorial linear regressions, in which the dependent variables are measurements of financial and market performance and assess corporate sustainable growth. The independent variables of these regressions are the sustainability metrics and the control variables included in the models. Most of the existing literature focuses on the causality between sustainability performance and financial performance. While most impact studies on financial performance are restricted to sustainability performance, this study refers to the degree of risk associated with the inadequate management of economic, social, and governance factors. This work examines the effects of ESG risk management, not only on performance, but also on corporate sustainable growth. It is one of the few studies that addresses the problem of the involvement of companies in controversial events and the way in which such events impact the sustainability and sustainable growth of the company.

Keywords: sustainability reporting; ESG risks; financial performance; market performance; sustainable growth (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:20:p:8536-:d:428675

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