The Impact of ESG Score and Controversy on Stock Performance

Paola Brighi (), Antonio Carlo Francesco Della Bina () and Valeria Venturelli ()
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Paola Brighi: University of Bologna
Antonio Carlo Francesco Della Bina: University of Bologna
Valeria Venturelli: CEFIN—Centro Studi Banca e Finanza

Chapter Chapter 9 in New Challenges for the Banking Industry, 2023, pp 213-252 from Palgrave Macmillan

Abstract: Abstract Using an extensive international dataset based on Refinitiv environmental, social, corporate governance (ESG), and controversies scores, this chapter contributes investigating whether a high overall ESG score improves firm value and decreases risk and to what extent ESG controversies may negatively affect a firm’s financial performance. We find strong evidence of an improvement in value and risk associated with a better ESG score. Results are confirmed in the case of every single E, S, and G pillar. Findings also suggest that firms facing adverse ESG events experience a significant negative effect on value and risk. Our results are robust to different value and risk variables specifications and highlight that controversies affect more financial firms and emerging markets.

Keywords: ESG scoring; Controversy scoring; Market Value; Risk (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-031-32931-9_9

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DOI: 10.1007/978-3-031-32931-9_9

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