The Relationship Between ESG Scores and Net Profit Growth in the Light of Factors Determining It

Abstract

The purpose of the article. The aim of the article is to analyze the growth of net profits in the context of factors influencing it, taking into account ESG strategy implemented by companies.Methodology. In the research, data from 238 matured, European companies, covering the period from 2013 to 2023, was analyzed. OLS models were tested, taking into account heteroscedasticity correction.Results of the research. As a result of the research, it was found that the profitability of assets and their size have a positive impact on the increase in net profits of the surveyed enterprises, but ESG has a negative influence on this increase, with environmental and social scores being statistically significant, while governance does not significantly affect the increase in profits, and therefore value creation.