ESG consequences for companies in the digital environment: insights from sector-specific performance across the EU-27

Vojtěch Kotrba (), Jakub Menšík and Luis F. Martinez ()
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Vojtěch Kotrba: Prague University of Economics and Business
Jakub Menšík: Prague University of Economics and Business
Luis F. Martinez: Universidade Nova de Lisboa

Journal of Marketing Analytics, 2025, vol. 13, issue 3, No 2, 574-586

Abstract: Abstract This study explores the differential impact of Environmental, Social, and Governance (ESG) factors on the economic performance of firms in digital versus traditional sectors, providing strategic insights for managers and policymakers. Using cross-sectional data from 1005 EU-27 firms from Bloomberg, the analysis applies econometric models on Return on Assets, Return on Equity, and Tobin’s Q, along with interaction terms to assess ESG’s role in the digital sector. Results indicate that ESG factors affect economic performance differently across sectors, with digital firms showing a generally stronger positive ESG-performance relationship. However, sector-specific differences exist: Environmental initiatives boost performance in Internet and Telecommunications firms, likely due to positive stakeholder perceptions, while they may hinder outcomes in Advertising and Media. Conversely, Social factors enhance reputation and engagement in Advertising and Media but show limited returns in Telecommunications. These findings suggest that digital firms can improve financial outcomes by tailoring ESG strategies to industry strengths, leveraging Environmental or Social components to meet sector-specific expectations. This approach enables digital companies to align ESG efforts more effectively, maximizing value in line with industry dynamics.

Keywords: ESG factors; Financial performance; Online marketing; Digital commerce; Sustainable practices; Digital innovation; Corporate strategies (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1057/s41270-024-00370-7

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