Nonlinear effects of ESG on energy‐adjusted firm efficiency: Evidence from the stakeholder engagement of apple incorporated

This study examines how the (i) overall environmental, social, and governance (OESG) performance; (ii) three individual E, S, and G (IESG) performance; and (iii) subcomponents of the three individual E, S, and G (SIESG) performance affect 29 Apple Incorporation partners' energy‐adjusted firm efficiency from a nonlinear perspective. Our truncated regression findings from 145 firm‐year observations for the period of 2016–2020 indicate that the association between OESG performance and energy‐adjusted firm efficiency is U‐shaped. However, this nonlinear U‐shape exists in the individual S and G but not E of the IESG performance. Moreover, only certain subcomponents of the SIESG performance are nonlinearly related to energy‐adjusted firm efficiency. Overall, we highlight both the costs and benefits of the ESG performance for maintaining sustainable development and stakeholder engagement. The energy‐adjusted firm efficiency estimated through the multidimensional data envelopment analysis approach is also noteworthy for policy and decision‐making purposes.