The Role of ESG Factors in Improving Firm Financial Performance

Alexandra Danila ()
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Alexandra Danila: “Ovidius” University of Constanța, Faculty of Economic Sciences, Romania

Ovidius University Annals, Economic Sciences Series, 2023, vol. XXIII, issue 2, 688-693

Abstract: The present research investigates the correlation between environmental, social, and governance (ESG) factors and financial performance, dissecting the impact of each element on a company's profitability. The study focuses on small and medium-sized enterprises (SMEs) situated in the SouthEast of Romania within the construction sector, spanning a five-year period (2016-2021). The empirical findings reveal a positive association between ESG practices and financial performance, pointing out that enhancing ESG initiatives could effectively improve profitability of SMEs.

Keywords: financial statements; ESG; return on equity; construction sector (search for similar items in EconPapers)
JEL-codes: G30 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:xxiii:y:2023:i:2:p:688-693

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