ESG activities in emerging markets during the COVID-19 pandemic

This study analyses the relationship between profitability and environmental, social, and governance (ESG) activities during the COVID-19 pandemic in a sample of publicly listed firms in emerging market countries. We find that the overall relationship between ESG activities and profitability was significantly higher during the worst period of the pandemic than the period following it. We also find that negative changes in profitability are associated with larger drops in ESG activities and that these drops are significantly larger during the hardest days of the pandemic. The findings in our study suggest that firms may reduce their commitment to ESG activities during difficult times in order to focus on their survivability.