Purpose. The study aims to determine the relationship between the integrated ESG index and the company's financial performance. Based on the set goal, our tasks were: the approbation of the toolkit to confirm the hypothesis regarding the presence of a positive relationship between the ESG index and the company‟s return on assets (ROA). Also, we seek to confirm or refute the hypothesis that companies with a higher return on assets more often implement initiatives based on ESG principles and are more socially responsible market participants than their competitors.
Design/methodology/approach. The methodological basis of the work was an empirical study of a sample of open data of 56 enterprises that operated in Ukraine in 2020. The source of obtaining panel data is the “Report on the level of transparency of Ukrainian companies” and the indicators of the enterprises included in the sample, obtained by the authors from the database: e-data. Summarize the advantages and disadvantages of contributions to the entity‟s paid capital as a source of financing investment activities.
Mathematical and statistical processing of the results was carried out by the authors using correlation and regression analysis methods.
Findings. As a result of assessing the relationship between the integrated ESG index and the profitability of the company's assets, we can state a moderate positive relationship between these features. A higher value of the return on assets contributes to an increase in the ESG index. In the analyzed sample, we can see that a higher value of the return on assets indicator encourages enterprises to more actively direct investments in projects and programs oriented to ESG initiatives. It is also worth noting that the ESG integral index level is influenced by other characteristics we did not evaluate in this study.
Practical implications. The obtained results have a practical orientation and can use in forming the company's strategy and making investment decisions by owners, top management, and investors.
Originality/value. Our study evaluates the impact of ROA on the activity of investments in projects and programs oriented to ESG initiatives. We hypothesized that this relationship intensifies as the company's profitability increases. As part of the data analysis, we test the hypothesis about the relationship between the profitability indicator: ROA and the integrated ESG index
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