The Impact of ESG Factors on the Firm Performance

Yueyuan Yang ()
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Yueyuan Yang: Beijing Jiaotong University, School of Economics and Management

A chapter in Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025), 2025, pp 938-945 from Springer

Abstract: Abstract In the evolving global business environment, this paper examines the impact of ESG on enterprises. Primarily, this paper introduces the background of ESG development in the changing business environment. This paper mainly discusses from four aspects. First, ESG rating plays a key role in shaping investors’ expectations. Secondly, from the perspective of risk management, effective risk management can minimize the negative impact, thereby enhancing the company’s reputation and ensuring long-term profitability. Thirdly, integrating ESG into a long-term strategy is critical. This can enhance the overall strength of the company and align investor expectations with consumer demand. However, over-investing in ESG can lead to undesirable consequences such as increased financial burdens and ESG inequality, which can damage a company’s reputation and growth prospects. In conclusion, while ESG has a profound impact on all aspects of business operations, companies should balance sustainability with cost-effectiveness when implementing ESG strategies to achieve long-term stability and create value for society.

Keywords: ESG Factors; Firm Performance; Long-Term Strategy (search for similar items in EconPapers)
Date: 2025
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DOI: 10.2991/978-94-6463-748-9_102

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