The Link Between ESG Factors and Corporate Profitability: Evidence from Resource-Intensive Industries in Europe and the USA

Recently, the role of businesses in advancing sustainable development has drawn growing attention from governments, investors, and a wide range of stakeholders. This increased focus has led enterprises to incorporate environmental, social, and governance (ESG) considerations into their strategic and operational decisions, driven by evolving regulatory frameworks, increasing investor scrutiny, and rising consumer expectations. Despite this shift toward sustainability-oriented practices, the relationship between ESG performance and financial results remains a subject of considerable debate and empirical uncertainty. The research examines the links between separate ESG pillars and the financial performance of enterprises operating within resource-intensive industries, such as energy, industrials, materials, and utilities across Europe and the USA, based on a sample of 384 companies, using data from 2015 to 2024. The study focuses on differences between regions and further examines whether differences in the influence of individual ESG dimensions on the financial results of enterprises are evident within specific industries. The research findings present identified positive and statistically significant relationships with the environmental pillar of ESG for both Europe and the US regions. There are differences between the social and governance pillars of ESG and the financial performance of the resource-intensive industries of Europe and the USA. In Europe, there is a positive influence of social-related factors on financial performance, while in the USA, there is a negative impact. However, the governance-related factor shows that a statistically significant relationship exists with financial performance in the USA, and a negative one in Europe. These findings show the different focus directions of Europe and the USA regions.