Exploring the ESG-finance relationship through PROMETHEE ranking

This study applies a well-known Multi Criteria Decision Making (MCDM) technique called Preference Ranking Organization METHod for Enrichment Evaluation (PROMETHEE) to investigate the ESG-financial performance relationship. Using a sample of S&P 500 firms from 2010 to 2023 and conducting the analysis at sector level, the study finds that there is no significant correlation between financial performance and ESG scores. These findings hold significant implications for investors, policymakers, and corporate stakeholders, underscoring the intricate and nuanced nature of the ESG-finance relationship. Our results are robust to alternative ESG benchmarks, samples, and estimation technique.