Impact of Environmental, Social, and Governance (ESG) Factors on Stock Prices and Investment Performance

Abstract

This study examines the relationship between Environmental, Social, and Governance (ESG) factors and stock prices as well as investment performance. ESG factors have become increasingly relevant in investment decisions as investors prioritize companies with sustainable practices. Using a sample of publicly-traded companies, this research analyzes the impact of ESG factors on stock prices and investment returns. The findings suggest that companies with strong ESG performance tend to have higher stock prices and better investment performance than those with weak ESG performance. The study also highlights the significance of the individual components of ESG, such as environmental policies and corporate governance practices, on stock prices and investment returns. Overall, this research provides valuable insights for investors seeking to incorporate ESG factors into their investment decision-making processes.