Unveiling economic performance rewards of social responsibility.

Abstract

Environmental Social and Governance (ESG) criteria focus on management and performance in these areas seeking to measure and evaluate companies’ performance in terms of sustainability and social responsibility, but this distinction is important to proper understanding of the criteria we analyze subsequently. Having contextualized the concept of sustainability and introduced the ESG criteria and their main factors this research aims to analyze if investment in sustainability directly influence financial performance. This research reviews the bibliography on Environmental Social and Governance (ESG) and its relationship with financial performance. The sample is consists of listed firms classified according to ESG ranking and the different instruments used for the ESG ranking and statistical analysis using SPSS. The analysis concludes that there are no significant correlations between companies that rank higher in the ESG ranking and their financial performance. Consciousness-raising and law have meant that these firms invest tremendous effort in ESG that is not reflected in their annual accounting and profitability. Future lines of research will need to study these correlations for multiple years.