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.
Brighi, P., Della Bina, A.C.F., Venturelli, V. (2023). The Impact of ESG Score and Controversy on Stock Performance. Cham : Palgrave Macmillan [10.1007/978-3-031-32931-9_9].
The Impact of ESG Score and Controversy on Stock Performance
Brighi, Paola;Della Bina, Antonio Carlo Francesco
;
2023
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.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
