The impact of environmental, social, And governance scores towards firms’ performance in New Zealand
Loading...
Supplementary material
Other Title
Authors
Geroda, M.K.B.
Hewagama, Gayani
Hewagama, Gayani
Author ORCID Profiles (clickable)
Degree
Grantor
Date
2024-12-10
Supervisors
Type
Conference Contribution - Oral Presentation
Ngā Upoko Tukutuku (Māori subject headings)
Keyword
New Zealand
firm value
business enterprises
ESG reporting
environmental, social and governance (ESG) impacts
sustainability reporting
firm value
business enterprises
ESG reporting
environmental, social and governance (ESG) impacts
sustainability reporting
ANZSRC Field of Research Code (2020)
Citation
Geroda, M., & Hewagama, G. (2024, December, 10). The impact of environmental, social, And governance scores towards firms’ performance in New Zealand [Paper presentation]. "Exploring Cutting-Edge Trends in Contemporary Accounting Research", 2024 Auckland Region Accounting (ARA) Conference, University of Auckland, New Zealand
https://hdl.handle.net/10652/6974
Abstract
PURPOSE
This paper investigates the effects of ESG disclosure scores on firm performance using data from listed companies in New Zealand. It compares ESG disclosure scores between carbon-sensitive and non-carbon-sensitive companies.
METHODOLOGY
The study examines 60 New Zealand-listed companies for the year ended 2023. Univariate and multivariate analyses are used to test the study's hypotheses. Firm performance is measured through operating performance (Return on Assets), financial performance (Return on Capital Employed), and market performance (Tobin's Q).
FINDINGS
The results indicate that the Social score is positively and significantly associated with market performance, while the Environmental and Governance scores have no significant impact on firm performance. There is a statistically significant difference in Environmental scores between carbon-sensitive and non-carbon-sensitive companies, with the carbon-sensitive group having a higher score. Further validation using ESG risk ratings reveals a statistically significant difference in the average ESG risk ratings between carbon sensitive and non-carbon-sensitive companies. The average risk rating for carbon-sensitive companies indicates medium risk, while for non-carbon-sensitive companies, it indicates low risk.
PRACTICAL IMPLICATIONS
These findings suggest that external stakeholders, such as creditors and investors, should consider the ESG risk profiles of the companies they invest in, as companies with higher ESG risk ratings may require more careful monitoring and assessment of potential risks. Both ESG scores as performance indicators and ESG risk ratings serve as valuable tools for stakeholders, helping to inform investment and lending decisions
Publisher
Permanent link
Link to ePress publication
DOI
Copyright holder
Authors
Copyright notice
All rights reserved