The relationship between multi-dimensional corporate sustainability and corporate financial performance

  • Andreas Pierides

Student thesis: Master's Thesis


The study seeks to investigate the relationship between a multi-dimensional corporate sustainability construct and corporate financial performance by applying fixed effects regression on a sample of 292 of the largest companies exchanged in European stock exchanges between 2017 and 2021. Corporate Social Responsibility, Corporate Governance, ESG and Sustainable Development Goals are integrated both theoretically and empirically in order to create a multi-dimensional sustainability construct and examine its relationship with accounting-based measures. Sustainability is examined through ESG Scores, Sustainable Development Goals engagement and individual scores of environmental, social and governance pillars and corporate financial performance will be proxied by Return on Assets (ROA) and Return on Equity (ROE) and the data are obtained from the Refinitiv Data Platform. The results show that emissions and board gender diversity are negatively correlated with ROA and ESG combined scores and workforce have a positive relationship with ROA. Additionally, workforce is positively related with ROE and ESG combined score, emissions and board gender diversity are negatively related with ROE. The findings showed that SDGs did not have any significant relationship with ROA and ROE. The results also show that based on the companies used in this study ROE is a better and more significant variable in investigating corporate financial performance as well as size and leverage are better control variables than beta. The results provide the basis that can be used in future studies that would integrate more accurate ESG metrics, Sustainable Development Goals engagement metrics and integrate institutionalized variables.
Date of Award15 Nov 2023
Original languageEnglish
SupervisorEshani Beddewela (Main Supervisor) & Emmanouil Apergis (Co-Supervisor)

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