Effect of Environmental, Social and Governance Initiatives on the Financial Performance of Cameroonian Small and Medium-Size Enterprises

This paper seeks to examine the effect of Environmental, Social and Governance (ESG) initiatives on the financial performance of Small and Medium-size Enterprises (SMEs) in Cameroon. In order to achieve this objective, a quantitative research strategy was adopted, in which an ordinary least square regression analysis was conducted on data collected from 64 SMEs demonstrating corporate citizen characteristics from two specific sectors of activities. The findings suggest that social and governance scores have a positive and significant effect on the financial performance of SMEs. Contrarily, the environmental score had a positive but rather insignificant effect on SMEs’ financial performance. The result shows that SMEs in Cameroon should devote more energy to social and governance issues especially if they aspire to operate on a large scale, as ESG practices would likely attract massive investment form ethical investors.