The effect of ESG scores on corporate financial performance: case study on South Africa

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dc.contributor.advisorNdlovu, Godfrey
dc.contributor.authorChoga, Simba Michael
dc.date.accessioned2025-08-04T13:32:54Z
dc.date.available2025-08-04T13:32:54Z
dc.date.issued2025
dc.date.updated2025-08-04T13:27:58Z
dc.description.abstractThis study seeks to examine the relationship between environmental, social and governance (ESG) scores and firm performance: using both accounting and market-based measures of firm performance. This research is important because it allows for valuable insights for investors and the local government, enabling them to navigate the complex environment of ESG disclosure and financial performance. Although the bulk of the evidence suggests the existence of a positive relationship between ESG scores and firm performance, a few studies find a negative relationship. Further, most research primarily use the combined ESG score and thus ignore the fact that the effect of the ESG subcomponents may vary. Using a panel of 38 JSE-listed firms over the period 2010 to 2022, the results from this study suggest existence of a negative but insignificant relationship between ESG scores and firm performance; regardless of the measure of performance used. Similar results are also found for the ESG subcomponents. The results suggest that firms engaged in ESG activities experience a negative effect on their profitability and market value. This would suggest that the push for ESG efforts negatively affects JSE-listed firms' performance which aligns with some previous research. Therefore, JSE-listed firms should consider investing less in ESG practices to improve firm performance.
dc.identifier.apacitationChoga, S. M. (2025). <i>The effect of ESG scores on corporate financial performance: case study on South Africa</i>. (). University of Cape Town ,Faculty of Commerce ,School of Economics. Retrieved from http://hdl.handle.net/11427/41553en_ZA
dc.identifier.chicagocitationChoga, Simba Michael. <i>"The effect of ESG scores on corporate financial performance: case study on South Africa."</i> ., University of Cape Town ,Faculty of Commerce ,School of Economics, 2025. http://hdl.handle.net/11427/41553en_ZA
dc.identifier.citationChoga, S.M. 2025. The effect of ESG scores on corporate financial performance: case study on South Africa. . University of Cape Town ,Faculty of Commerce ,School of Economics. http://hdl.handle.net/11427/41553en_ZA
dc.identifier.ris TY - Thesis / Dissertation AU - Choga, Simba Michael AB - This study seeks to examine the relationship between environmental, social and governance (ESG) scores and firm performance: using both accounting and market-based measures of firm performance. This research is important because it allows for valuable insights for investors and the local government, enabling them to navigate the complex environment of ESG disclosure and financial performance. Although the bulk of the evidence suggests the existence of a positive relationship between ESG scores and firm performance, a few studies find a negative relationship. Further, most research primarily use the combined ESG score and thus ignore the fact that the effect of the ESG subcomponents may vary. Using a panel of 38 JSE-listed firms over the period 2010 to 2022, the results from this study suggest existence of a negative but insignificant relationship between ESG scores and firm performance; regardless of the measure of performance used. Similar results are also found for the ESG subcomponents. The results suggest that firms engaged in ESG activities experience a negative effect on their profitability and market value. This would suggest that the push for ESG efforts negatively affects JSE-listed firms' performance which aligns with some previous research. Therefore, JSE-listed firms should consider investing less in ESG practices to improve firm performance. DA - 2025 DB - OpenUCT DP - University of Cape Town KW - environmental KW - social KW - governance KW - ESG KW - firm performance KW - CSR LK - https://open.uct.ac.za PB - University of Cape Town PY - 2025 T1 - The effect of ESG scores on corporate financial performance: case study on South Africa TI - The effect of ESG scores on corporate financial performance: case study on South Africa UR - http://hdl.handle.net/11427/41553 ER - en_ZA
dc.identifier.urihttp://hdl.handle.net/11427/41553
dc.identifier.vancouvercitationChoga SM. The effect of ESG scores on corporate financial performance: case study on South Africa. []. University of Cape Town ,Faculty of Commerce ,School of Economics, 2025 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/41553en_ZA
dc.language.isoen
dc.language.rfc3066eng
dc.publisher.departmentSchool of Economics
dc.publisher.facultyFaculty of Commerce
dc.publisher.institutionUniversity of Cape Town
dc.subjectenvironmental
dc.subjectsocial
dc.subjectgovernance
dc.subjectESG
dc.subjectfirm performance
dc.subjectCSR
dc.titleThe effect of ESG scores on corporate financial performance: case study on South Africa
dc.typeThesis / Dissertation
dc.type.qualificationlevelMasters
dc.type.qualificationlevelMCom
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