ESG, COE and Profitability in the Oil and Gas Sector

Carlo Bellavite Pellegrini (), Raul Caruso () and Marco Seracini
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Carlo Bellavite Pellegrini: Catholic University of the Sacred Heart
Marco Seracini: Catholic University of the Sacred Heart

Chapter Chapter 7 in Climate Change Adaptation, Governance and New Issues of Value, 2022, pp 127-153 from Palgrave Macmillan

Abstract: Abstract This chapter empirically explores Oil and Gas sector, trying to investigate the effect of ESG Scores on (1) Cost of equity (COE) and (2) Firm’s profitability (FP) for a sample of operating firms. We focus on a panel of data composed of more than 100 public firms, from 2002 to 2018/2019, and the main variables of interest are (1) The Implied Cost of Equity and (2) Return on Assets (ROA). We propose a dichotomic analysis with different aims of research: in the first analysis we try to estimate the firms’ ex-ante cost of equity adopting Easton Model, which expresses the share price in terms of one-year-ahead expected dividend per share and one- and two-year-ahead expected earnings per share. For the second analysis instead, we consider Return on Assets as a proxy for a firm’s profitability.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:pal:psifcp:978-3-030-90115-8_7

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DOI: 10.1007/978-3-030-90115-8_7

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