Linking ESG Programs to Corporate Financial Performance: An Econometric Analysis Approach

As businesses increasingly emphasize the integration of environmental, social, and governance (ESG) initiatives into their operations, executives are not only considering the ethical implications but also seeking to quantify their impact on corporate financial performance (CFP). In the contemporary corporate landscape, a significant 90 percent of ESG-focused respondents prioritize the environmental aspect, with 52 percent emphasizing social aspects and 60 percent focusing on governance components. The surge in ESG integration is not mere virtue signaling; through advanced econometric analysis, this exploration aims to reveal the profound connection between ESG initiatives and Corporate Financial Performance (CFP). By deciphering the nuanced interplay between sustainability efforts and their measurable impact on financial outcomes, this research positions ESG not only as a moral commitment but also as a strategic financial catalyst, shedding light on its potential to drive positive financial results.