The Impact of Environmental Social and Governance (ESG) Reporting on Corporate Financial Performance

Abstract

This paper explores the impact of Environmental, Social, and Governance (ESG) reporting on corporate financial performance (CFP), drawing from both theoretical frameworks and empirical data across global corporations. ESG reporting has become a crucial aspect of corporate transparency, driven by stakeholder pressure, regulatory changes, and the rising awareness of sustainability. Using quantitative and qualitative data from multiple industries, we analyze the correlation between robust ESG practices and financial outcomes such as profitability, stock performance, and risk mitigation. Findings suggest that companies with higher ESG scores generally exhibit improved financial performance, though variations exist depending on industry, region, and specific ESG dimensions.