ESG scores and stock performance : An empirical study on the ESG and stock market outcomes across public companies in Nordic countries

The study investigates the relationship between Environmental, Social and Governance (ESG) ratings and the performance of stocks among publicly traded companies in the Nordic region. It examines both overall ESG ratings and the individual components (E, S, and G) with its relation to stock returns for the year 2024-2025, utilizing the cross-sectional dataset of 91 large-cap stocks from Denmark, Finland, Norway, and Sweden, that are listed in Nasdaq Nordic. The research adopts a quantitative data analysis approach to explore the correlation between the variables conducting descriptive statistics, Pearson correlation, ANOVA, and multiple linear regression models. The results reveal that neither the overall ESG scores nor the individual E, S, and G components have any statistically significant correlation with the stock returns in the short term. These findings align with the efficient market hypothesis, suggesting that ESG information might already be priced into stock value in robust and transparent market conditions. This research contributes to the existing literature on ESG investment by offering insights pertinent to the region and highlighting the significance of market context in assessing the materiality of ESG for risk management and financial performance.