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Forum | Papers » The Esg orientation of European companies. Disputes, Value and Risks

The Esg orientation of European companies. Disputes, Value and Risks

Paola Brighi, Antonio Carlo Francesco Della Bina, Valeria Venturelli
June 2023 - n. 6
Keywords: Esg, controversie, valore di mercato, rischio
Jel codes: G30, M14, Q56

Using an extensive international dataset of Esg scores provided by Refinitiv with reference to a sample of 1.271 listed companies headquartered in 22 geographical European countries in the period 2002-2018, this article contributes to investigating whether Esg controversy scores affect the risk and performance of a company. We find evidence that firms facing Esg controversies, experience a significant negative effect on firm value and an increased risk. This result can, however, be reversed in the case firms take advantage of higher Esg scoring. In terms of policy implications, findings suggest that controlling for Esg is important not only from a macro sustainability point of view but also from an individual firm risk-return perspective.

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