The Relationship Between ESG and Financial Performance in Global Firms: A Multidimensional Study Across Sectors and Regions for the Period 2015–2025

Hasan Tutar, Dalia Štreimikienė and Hakan Tahiri Mutlu

Corporate Social Responsibility and Environmental Management, 2025, vol. 32, issue 6, 8280-8294

Abstract: This study investigates the relationship between Environmental, Social, and Governance (ESG) performance and the financial performance of global firms by integrating stakeholder theory, legitimacy theory, and the resource‐based view (RBV). While stakeholder and legitimacy theories emphasize external alignment, RBV frames ESG as an internal capability, highlighting the complementarity and tension among these perspectives. The analysis focuses on a panel of 287 publicly listed firms from multiple sectors and regions, covering the 2015–2025 period. The 2025 data consist of projections from Bloomberg and MSCI ESG Scores. The 2025 data used in this study are projections based on quarterly ESG and financial reports from Bloomberg Terminal and MSCI ESG Ratings. These were used solely for descriptive and forecasting purposes and were not included in causal or inferential analyses. ESG data were obtained from Refinitiv Eikon, and financial performance was assessed using three indicators: Return on Assets (ROA), Return on Equity (ROE), and Tobin's Q. Cluster analysis was employed to classify firms based on ESG performance patterns, while Granger causality tests were used to examine temporal relationships between ESG indicators and financial performance. The results reveal sectoral and temporal heterogeneity. In particular, environmental performance shows more stable positive associations with financial indicators than social and governance dimensions. Granger results indicate that ESG affects financial performance with varying time lags depending on the sector and ESG dimension. These findings underscore the strategic relevance of ESG and suggest that a uniform approach to ESG integration may be ineffective. This research contributes to the growing ESG literature by combining multiple theoretical lenses and methodological approaches. Managerial implications and policy relevance are discussed, and the study outlines future research directions, including the need to examine the role of macroeconomic shocks and regulatory contexts. Limitations such as sample size and generalizability are acknowledged.

Date: 2025
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https://doi.org/10.1002/csr.70136

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Persistent link: https://EconPapers.repec.org/RePEc:wly:corsem:v:32:y:2025:i:6:p:8280-8294

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