The effect of ESG performance on financial firm performance. An emperical analysis of publicly listed companies on the NASDAQ

Abstract

This paper examines the relationship between ESG performance and financial firm performance for companies listed on the NASDAQ from 2002 until 2022. ESG performance is measured as the MSCI rating for overall ESG performance and the three individual pillars: Environmental, Social and Governance. This paper diversifies financial firm performance into three main proxies: Stock return, Earnings Per Share and Tobin’s Q. The main findings show that ESG performance has a significant positive effect on Earnings Per Share and depending on the regression specification on Tobin’s Q, but there is no significant relationship between ESG performance and Stock return.