The impact of sustainable investment on firm performance in South Africa

Vongani V. Masongweni and Beatrice Desiree Simo-Kengne ()

South African Journal of Accounting Research, 2024, vol. 38, issue 2, 146-173

Abstract: Purpose: This study investigates the influence of environmental, social, and governance (ESG) scores on the financial performance of firms in South Africa across industries.Motivation: In the context of the growing importance of sustainability reporting, understanding the link between ESG and firm performance is critical for informed and sustainable corporate strategies.Design/Methodology/Approach: The study employs panel data regression techniques on secondary data from 120 Johannesburg Stock Exchange-listed firms between 2015 and 2020.Main Findings: Overall, the composite ESG scores do not significantly affect the financial performance of South African companies. However, scores from social and governance pillars show a positive association with firm performance, while environmental scores have a limited effect.Practical Implications/Managerial Impact: These findings suggest that not all ESG activities are equally relevant for firm profitability. Corporate managers should prioritise industry-relevant ESG pillars to enhance firm profitability.Novelty/Contribution: The study expands empirical evidence in an emerging market context, analysing the impact of disaggregated ESG scores and providing comparative industry-specific analysis. This contributes to a nuanced understanding of the ESG-performance nexus.

Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/10291954.2024.2306701 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rsarxx:v:38:y:2024:i:2:p:146-173

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rsar20

DOI: 10.1080/10291954.2024.2306701

Access Statistics for this article

South African Journal of Accounting Research is currently edited by Soon Nel

More articles in South African Journal of Accounting Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().