Nexus between Environmental, Social and Governance (ESG) Pillars and Financial Performance of Pakistani’s Firms
Abstract
Concentrating on ESG issues has become a point of interest for shareholders, investors and governments, like a risk management concern. The primary objective of this research study is to determine the impact of ESG on financial performance. The current study contributes to the existing body of literature in the following distinctive manners. Firstly, the current study examines the influence of ESG on the financial performance of firms. Secondly, the study uses country-level governance as a replacement form of firm-level. The present study analyzes the available sample from non-financial sector, listed on the Stock Exchange of Pakistan from 2013-2022. The present study calculates the dependent variable from accounting-based approach which is Return on assets (ROA). This study applied ordinary least square regression (OLS) to analyze the panel data. The result of the study depicts that environmental, social and governance are significant determinants that influence the financial performance in Pakistan. The results of this study provide a guideline for policy management and practical implication to non-financial firms, shareholders and policymakers.
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