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The effect of ESG scores on corporate financial performance: case study on South Africa
This study seeks to examine the relationship between environmental, social and governance (ESG) scores and firm performance: using both accounting and market-based measures of firm performance. This research is important because it allows for valuable insights for investors and the local government,...
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| Format: | Thesis |
| Language: | English English |
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School of Economics
2025
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| _version_ | 1867613614922268672 |
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| access_status_str | Open Access |
| author | Choga, Simba Michael |
| author2 | Ndlovu, Godfrey |
| author_browse | Choga, Simba Michael Ndlovu, Godfrey |
| author_facet | Ndlovu, Godfrey Choga, Simba Michael |
| author_sort | Choga, Simba Michael |
| collection | Thesis |
| description | This study seeks to examine the relationship between environmental, social and governance (ESG) scores and firm performance: using both accounting and market-based measures of firm performance. This research is important because it allows for valuable insights for investors and the local government, enabling them to navigate the complex environment of ESG disclosure and financial performance. Although the bulk of the evidence suggests the existence of a positive relationship between ESG scores and firm performance, a few studies find a negative relationship. Further, most research primarily use the combined ESG score and thus ignore the fact that the effect of the ESG subcomponents may vary. Using a panel of 38 JSE-listed firms over the period 2010 to 2022, the results from this study suggest existence of a negative but insignificant relationship between ESG scores and firm performance; regardless of the measure of performance used. Similar results are also found for the ESG subcomponents. The results suggest that firms engaged in ESG activities experience a negative effect on their profitability and market value. This would suggest that the push for ESG efforts negatively affects JSE-listed firms' performance which aligns with some previous research. Therefore, JSE-listed firms should consider investing less in ESG practices to improve firm performance. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/41553 |
| institution | University of Cape Town (South Africa) |
| language | English eng |
| last_indexed | 2026-06-10T12:38:57.522Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2025 |
| publishDateRange | 2025 |
| publishDateSort | 2025 |
| publisher | School of Economics |
| publisherStr | School of Economics |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/41553 The effect of ESG scores on corporate financial performance: case study on South Africa Choga, Simba Michael Ndlovu, Godfrey environmental social governance ESG firm performance CSR This study seeks to examine the relationship between environmental, social and governance (ESG) scores and firm performance: using both accounting and market-based measures of firm performance. This research is important because it allows for valuable insights for investors and the local government, enabling them to navigate the complex environment of ESG disclosure and financial performance. Although the bulk of the evidence suggests the existence of a positive relationship between ESG scores and firm performance, a few studies find a negative relationship. Further, most research primarily use the combined ESG score and thus ignore the fact that the effect of the ESG subcomponents may vary. Using a panel of 38 JSE-listed firms over the period 2010 to 2022, the results from this study suggest existence of a negative but insignificant relationship between ESG scores and firm performance; regardless of the measure of performance used. Similar results are also found for the ESG subcomponents. The results suggest that firms engaged in ESG activities experience a negative effect on their profitability and market value. This would suggest that the push for ESG efforts negatively affects JSE-listed firms' performance which aligns with some previous research. Therefore, JSE-listed firms should consider investing less in ESG practices to improve firm performance. 2025-08-04T13:32:54Z 2025-08-04T13:32:54Z 2025 2025-08-04T13:27:58Z Thesis / Dissertation Masters MCom http://hdl.handle.net/11427/41553 en eng application/pdf School of Economics Faculty of Commerce University of Cape Town |
| spellingShingle | environmental social governance ESG firm performance CSR Choga, Simba Michael The effect of ESG scores on corporate financial performance: case study on South Africa |
| thesis_degree_str | Master's |
| title | The effect of ESG scores on corporate financial performance: case study on South Africa |
| title_full | The effect of ESG scores on corporate financial performance: case study on South Africa |
| title_fullStr | The effect of ESG scores on corporate financial performance: case study on South Africa |
| title_full_unstemmed | The effect of ESG scores on corporate financial performance: case study on South Africa |
| title_short | The effect of ESG scores on corporate financial performance: case study on South Africa |
| title_sort | effect of esg scores on corporate financial performance case study on south africa |
| topic | environmental social governance ESG firm performance CSR |
| url | http://hdl.handle.net/11427/41553 |
| work_keys_str_mv | AT chogasimbamichael theeffectofesgscoresoncorporatefinancialperformancecasestudyonsouthafrica AT chogasimbamichael effectofesgscoresoncorporatefinancialperformancecasestudyonsouthafrica |