ASSOCIATION BETWEEN CORPORATE FINANCIAL PERFORMANCE AND ESG RATINGS OF PUBLIC COMPANIES: AGGREGATE REGRESSION ANALYSIS

ESG ratings have become a primary tool to evaluate how sustainably public companies operate and how they perform on non-financial metrics. Most of the studies so far have focused on how ESG factors influence corporate financial performance (CFP), while the reverse relationship has received less attention. This article analyses whether and to what extent corporate financial performance affects ESG ratings. The study is based on a crosssectional regression analysis using ESG ratings from LSEG Data & Analytics and a range of CFP indicators. The results show a statistically significant but moderate relationship between CFP and ESG ratings, with company size and operating efficiency having a positive impact, while market multipliers and ownership structure show a negative relationship