THE IMPACT OF ESG DISCLOSURES ON FINANCIAL PERFORMANCE: EVIDENCE FROM EUROPEAN LISTED COMPANIES

Authors

  • Dr Muhammad Ehsan Javaid Department of Business Administration Allama Iqbal Open University Author
  • Muzafar Hussain Shah Department of Business Administration Sukkur IBA University Author
  • Shehar Yar Khan Department of Business Education The University of Chenab, Gujrat Author

Abstract

The increasing global emphasis on sustainability has prompted firms to integrate ESG practices into their strategic agendas. This study investigates the impact of ESG disclosures on firm financial performance, focusing on firms operating within the European manufacturing sector. Using a fixed-effect panel regression model, the analysis incorporates firm-specific control variables such as firm size, capital structure and capital asset intensity to ensure robustness. The empirical findings reveal a statistically significant and positive relationship between ESG engagement and firm profitability, supporting the notion that sustainable practices enhance organizational resilience and stakeholder trust. The results are interpreted through the lens of Stakeholder Theory, the RBV, and the Trade-Off Theory, highlighting how ESG activities serve as both strategic resources and mechanisms for managing stakeholder expectations.

Keywords: Environmental, Social, Governance, ESG, Sustainability.

Additional Files

Published

2025-08-04

Issue

Vol. 3 No. 3 (2025): Research Consortium Archive

Section

Articles

How to Cite

THE IMPACT OF ESG DISCLOSURES ON FINANCIAL PERFORMANCE: EVIDENCE FROM EUROPEAN LISTED COMPANIES. (2025). Research Consortium Archive, 3(3), 559-569. https://rc-archive.com/index.php/Journal/article/view/218