Sustainable Finance and ESG Performance: An Empirical Examination of Financial and Non-Financial Outcomes

Abstract

The perception and application of the concept of sustainable finance have implications on the world interdependence of the so-called ESG as a firm-level performance indicator. However, this leaves a gap particularly in the context of the emerging markets in the empirical literature. The present research tries that discourse the gap through defining influence ESG performance has on financial performance. The research remains created arranged a panel data by 428 publicly registered Asian corporations more than eight years of existence (2015 to 2023). The regression applied to address the research question was the fixed effect regression, revealing the influence of the overall ESG and constituent dimension of the ESG scores taking place marketplace worth indicators, the return on assets (ROA) and the Tobin Q. It concludes the research that the above average performance of ESG scores enhances a performance highly on the accounting and market indicators of performance. Moreover, the research results in an environmental and governance indicator, in comparison with the social one, being less well explained by the rest. The article gives evidence that ESG application extends beyond window-dressing to the achievement, retention, and sustainable financial performance. The evidences hold value to managers, value (sustainable) creation geared investors and policy makers.