Impact of Corporate Environment, Social, and Governance (ESG) Practices on Stock Market Performance
Angjun He
Co-Presenters: Individual Presentation
College: College of Business and Public Management
Major: Finance
Faculty Research Mentor: Huaibing Yu
Abstract:
This research examines the relationship between a firm’s Environmental, Social, and Governance (ESG) practices and its stock market performance. As investors increasingly prioritize sustainable investing, ESG metrics have become essential in evaluating a company’s long-term value and risk profile. By analyzing a diverse sample of publicly listed companies, this study aims to shed light on how strong ESG practices influence stock returns, firm valuation, and volatility.To achieve this, the research will employ quantitative methods, utilizing publicly available ESG scores and historical stock price data. Statistical analyses and regression models will assess whether companies with higher ESG scores consistently outperform peers with weaker ESG credentials. Additionally, the study will investigate whether specific ESG dimensions—environmental, social, or governance—carry varying weights in explaining performance differentials across industries.The findings could offer important insights for both investors and corporate decision-makers. For investors, strong empirical support for ESG-driven outperformance may highlight sustainable investing as a viable strategy. For corporate leadership, demonstrating how commitment to ethical governance and social responsibility fosters positive market reactions could justify additional investments in ESG initiatives. Ultimately, this research aims to contribute to a deeper understanding of the tangible financial benefits associated with responsible corporate behavior.