ENVIRONMENTAL, SOCIAL AND CORPORATE
GOVERNANCE AND ITS EFFECT ON THE MARKET VALUE OF THE ENTITIES
Name: AMANDA GASPAR CITTY
Publication date: 19/06/2023
Examining board:
Name |
Role |
|---|---|
| DIANE ROSSI MAXIMIANO REINA | Advisor |
Summary: ESG can be understood as the way entities and investors integrate environmental,
social, and governance precautions into their business and stakeholder relationships.
Thus, the study aims to analyze the effect of environmental, social, and corporate
governance (ESG) on the market value of entities in different sectors listed on B3. In
order to address the study hypotheses, statistical techniques with panel data
regression were used. The dependent variable, entity market value, was measured
through three proxies: Tobin's Q, Market to Book ratio, and Value. The chosen
independent variables were ESG, company sectors, and the interaction between them,
along with control variables. The sample included 94 entities listed on B3 between
2011 and 2021. The results demonstrate that the adoption of ESG practices has a
positive impact on the market value of companies listed on B3, and that the relationship
between ESG practice and market value varies among the sectors of B3, confirming
the first and second hypotheses of the study. It can be concluded that the relationship
between ESG and the market value of companies listed on B3 is influenced by the
sectors in which the companies operate, and that the adoption of ESG practices does
not guarantee an automatic increase in market value. Furthermore, it was observed
that specific sectors, such as Cyclical Consumer Goods, Information Technology, and
Utilities, exhibit a significant negative relationship with ESG and market value, as
indicated by the three dependent variables, highlighting the sensitivity of these sectors
to environmental, social, and governance aspects in all three models. The results of
this research provide a significant contribution to companies and investors, who can
benefit from incorporating ESG practices into their business and investment strategies.
Moreover, society as a whole can also benefit, as companies that adopt ESG practices
promote positive impacts on environmental, social, and governance issues,
contributing to the creation of a more sustainable and equitable world.
