Environment, Social, and Governance Score and Value Added Impacts on Market Capitalization: A Sectoral-Based Approach

Radu-Alexandru Șerban, Diana Marieta Mihaiu and Mihai Țichindelean
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Radu-Alexandru Șerban: Department of Management, Marketing and Business Administration, Faculty of Economic Sciences, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania
Diana Marieta Mihaiu: Department of Finance and Accounting, Faculty of Economic Sciences, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania
Mihai Țichindelean: Department of Management, Marketing and Business Administration, Faculty of Economic Sciences, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania

Sustainability, 2022, vol. 14, issue 4, 1-25

Abstract: The main goal of this study was to measure the impact of the environmental, social, and governance (ESG) sustainability score and value added to companies’ market capitalization. Therefore, financial and sustainable performance were measured in a sample of 5557 companies divided into 9 economic sectors of activity from 78 countries and 6 regions (Americas: 2144; Asia: 1770; Europe: 1232; Oceania: 311; Africa: 90; United Kingdom: 10). The analyzed sample consisted of publicly traded companies ranked by market capitalization (from small-cap to large-cap), for which the ESG score was measured in the analyzed period: the financial year was 2019, before the advent of the COVID-19 pandemic. Using two methods (multiple linear regression and complementary quantile regression), we found a direct link between the ESG score and value added variables and market capitalization, with distinct impacts at the economic sector level for ESG score and relatively constant impact for value added.

Keywords: ESG score; value added; market capitalization; economic sector; impact; quantile regression (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 (3)

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