Substance versus symbolism: how ESG dimensions relate to financial performance in family firms

Purpose This study examines how ESG performance, environmental innovation, exposure to ESG controversies, and internal governance mechanisms are associated with the financial performance of listed family firms. Socioemotional wealth (SEW) is used as an interpretive lens rather than measured as a moderator. Design/methodology/approach A near-balanced panel of 83 firms from the Global 500 Family Business Index over 2016–2023 (662 firm-year observations) is analysed using two-way fixed effects models with Driscoll-Kraay standard errors. Robustness checks include clustered and bootstrap inference, lagged specifications and an alternative measure of controversy. Regional differences are examined in an exploratory pooled interaction model. Findings ESG performance is positively associated with Tobin's Q but not with accounting metrics. Environmental innovation is associated with higher ROE, although this association does not survive conservative inference. Controversy exposure is associated with lower ROA and ROE. The only result robust to every inference procedure concerns governance: where boards reach a critical mass of female directors, the market valuation of ESG is reversed rather than amplified. Practical implications ESG score optimisation should not be treated as a route to accounting value in family firms. Boards should not assume that formal gender diversity reinforces the credibility of ESG commitments. Originality/value The study integrates ESG performance, environmental innovation, controversy exposure, and board governance into a single framework for large family firms and shows that board composition operates as a boundary condition of the ESG market signal.

Authors

Institutions

Publication Details

Journal
Journal of Family Business Management
Published
2026-10-26
DOI
https://doi.org/10.1108/jfbm-09-2026-0316
Primary Topic
Family Business Performance and Succession
Type
article
Field-Weighted Citation Impact
0.00
Controls
|||
ALL TIME
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
article

Substance versus symbolism: how ESG dimensions relate to financial performance in family firms

Luís Almeida, Beatriz Oliveira
1 links
Journal of Family Business Management
Family Business Performance and Succession
article

Substance versus symbolism: how ESG dimensions relate to financial performance in family firms

Luís Almeida, Beatriz Oliveira
article en

Abstract

Purpose This study examines how ESG performance, environmental innovation, exposure to ESG controversies, and internal governance mechanisms are associated with the financial performance of listed family firms. Socioemotional wealth (SEW) is used as an interpretive lens rather than measured as a moderator. Design/methodology/approach A near-balanced panel of 83 firms from the Global 500 Family Business Index over 2016–2023 (662 firm-year observations) is analysed using two-way fixed effects models with Driscoll-Kraay standard errors. Robustness checks include clustered and bootstrap inference, lagged specifications and an alternative measure of controversy. Regional differences are examined in an exploratory pooled interaction model. Findings ESG performance is positively associated with Tobin's Q but not with accounting metrics. Environmental innovation is associated with higher ROE, although this association does not survive conservative inference. Controversy exposure is associated with lower ROA and ROE. The only result robust to every inference procedure concerns governance: where boards reach a critical mass of female directors, the market valuation of ESG is reversed rather than amplified. Practical implications ESG score optimisation should not be treated as a route to accounting value in family firms. Boards should not assume that formal gender diversity reinforces the credibility of ESG commitments. Originality/value The study integrates ESG performance, environmental innovation, controversy exposure, and board governance into a single framework for large family firms and shows that board composition operates as a boundary condition of the ESG market signal.

Journal of Family Business Management
University of Aveiro (PT)
Openalex Percentile: Top 6%
Family Business Performance and Succession
AI Navigator

Ask Laika to Summarize, Analyze, and Connect papers live on the map.

Summarize Papers & Methodologies

Extract key findings, datasets, and comparative methods across publications.

Benchmark Rankings & Visual Analytics

Rank top research institutions, authors, funders, topics, and journals by Field-Weighted Citation Impact (FWCI) and paper volume with instant charts.

Connect Distant Disciplines

Bridge topological clusters on the map to find hidden collaborative intersections.

Laika access coming soon