ESG and performance in Santa Catarina’s forestry sector

This study examines the correlation between ESG (Environmental, Social, and Governance) practices and the financial and organizational performance of forestry companies in Santa Catarina, Brazil. Using a quantitative approach, primary data were collected from 283 employees through questionnaires and complemented with secondary financial data covering the period from 2019 to 2023. ESG performance was evaluated through Spearman’s correlation, non-parametric tests, random-effects panel regression, and linear interpolation, ensuring robustness in the analysis. Results show a positive association between ESG and organizational efficiency, particularly profitability, with stronger effects for the Social and Environmental dimensions. Governance, however, was associated with higher turnover, reflecting processes of internal restructuring. Effects on profit and operating costs were not statistically significant in the short term, suggesting a delayed impact of ESG on absolute financial outcomes. Limitations include the cross-sectional design and reliance on self-reported data, which may constrain generalizability. The study contributes by combining employee perceptions with objective indicators, reinforcing the strategic importance of ESG adoption as a driver of efficiency and sustainability in an underexplored and resource-intensive sector.