<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The main objective of this paper is to analyze if there is a link between financial performance and sustainability in the case of listed companies on stock markets, worldwide, and across all sectors of activity because sustainability has become an important part of the company’s strategy. The financial performance of the companies was calculated using public financial data from the annual financial statements, while the environmental, social, and governance (ESG), and controversies scores were used as performance metrics for sustainability at company level. To evaluate financial performance a variety of indicators were used, such as assets management, debt management or market value performance, as a benchmark tool to compare the standing of companies in each sector of activity analyzed. Our findings showed that there are different relations (strong or weak) between financial performance and sustainability if a sectoral-based approach is considered. As a result, the link between financial performance and sustainability was tested on a sample of more than 5,000 companies divided into 10 sectors of activities, according to the Global Industry Classification Standard (GICS), for the period 2017-2021. The main conclusion of this study is that they are interrelated, capitalizing on each other.</p>
</abstract>

The main objective of this paper is to analyze if there is a link between financial performance and sustainability in the case of listed companies on stock markets, worldwide, and across all sectors of activity because sustainability has become an important part of the company’s strategy. The financial performance of the companies was calculated using public financial data from the annual financial statements, while the environmental, social, and governance (ESG), and controversies scores were used as performance metrics for sustainability at company level. To evaluate financial performance a variety of indicators were used, such as assets management, debt management or market value performance, as a benchmark tool to compare the standing of companies in each sector of activity analyzed. Our findings showed that there are different relations (strong or weak) between financial performance and sustainability if a sectoral-based approach is considered. As a result, the link between financial performance and sustainability was tested on a sample of more than 5,000 companies divided into 10 sectors of activities, according to the Global Industry Classification Standard (GICS), for the period 2017-2021. The main conclusion of this study is that they are interrelated, capitalizing on each other.

A Sectoral-Based Approach to the Link Between Financial Performance and Sustainability

Studies in Business and Economics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The main objective of this paper is to analyze if there is a link between financial performance and sustainability in the case of listed companies on stock...

A Sectoral-Based Approach to the Link Between Financial Performance and Sustainability

Publié en ligne: 15 mai 2023

Pages: 367 - 377

DOI: https://doi.org/10.2478/sbe-2023-0020

Mots clés
Financial Performance, ESG Controversies Score, Environmental Pillars, Z-Score Function, Sector of Activity

© 2023 Radu-Alexandru Șerban et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

A Sectoral-Based Approach to the Link Between Financial Performance and Sustainability

Publié en ligne: 15 mai 2023

Pages: 367 - 377

DOI: https://doi.org/10.2478/sbe-2023-0020

Mots clésFinancial Performance, ESG Controversies Score, Environmental Pillars, Z-Score Function, Sector of Activity

© 2023 Radu-Alexandru Șerban et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Mots clés
Financial Performance, ESG Controversies Score, Environmental Pillars, Z-Score Function, Sector of Activity