Financial Stability in Companies with High ESG Scores: Evidence from North America Using the Ohlson O-Score

The benefits and advantages of the incorporation of ESG (Environmental, Social, Governing)-related policies have been discussed extensively. However, research articles focus not only on the socioecological aspects of Corporate Social Responsibility (CSR) but also on the underlying effects on a corpo...

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Veröffentlicht in:Sustainability 2022-01, Vol.14 (1), p.479
Hauptverfasser: Lisin, Anton, Kushnir, Andrei, Koryakov, Alexey G, Fomenko, Natalia, Shchukina, Tatyana
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container_issue 1
container_start_page 479
container_title Sustainability
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creator Lisin, Anton
Kushnir, Andrei
Koryakov, Alexey G
Fomenko, Natalia
Shchukina, Tatyana
description The benefits and advantages of the incorporation of ESG (Environmental, Social, Governing)-related policies have been discussed extensively. However, research articles focus not only on the socioecological aspects of Corporate Social Responsibility (CSR) but also on the underlying effects on a corporation’s corporate financial performance (CFP). In this regard, the current study aims to analyze the impact of ESG parameters on corporations’ financial stability. A sample size of 691 companies in North American countries was investigated in order to test the hypothesis that ESG has an effect on the likelihood of a company going bankrupt using the Ohlson O-score. This is conducted using regression models and the Pearson correlation coefficient. Furthermore, a follow-up hypothesis on the relationship between firm size and ESG is also tested in order to evaluate a tendency of corporate growth through ESG-based sustainable development. The results of the study conclude that the governing pillar of ESG factors has the highest positive impact on corporations’ financial success. Furthermore, the analysis conducted in the study with its sample size confirms the hypothesis that larger firms tend to have higher ESG scores.
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subjects Corporate social responsibility
Correlation coefficient
Correlation coefficients
Disclosure
Ethics
Financial planners
Hypotheses
Impact analysis
Information services
Investments
Literature reviews
Online information services
Online services
Regression analysis
Research methodology
Social aspects
Social investing
Social responsibility
Stability analysis
Sustainability
Sustainable development
title Financial Stability in Companies with High ESG Scores: Evidence from North America Using the Ohlson O-Score
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