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The ESG Reporting of EU Public Companies—Does the Company’s Capitalisation Matter?

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  • Małgorzata Janicka

    (Department of International Finance and Investment, Faculty of Economics and Sociology, University of Lodz, Rewolucji 1905 Street 41, 90–255 Lodz, Poland)

  • Artur Sajnóg

    (Department of International Finance and Investment, Faculty of Economics and Sociology, University of Lodz, Rewolucji 1905 Street 41, 90–255 Lodz, Poland)

Abstract

Large companies in the European Union are required to publish information related to environmental, social and governance (ESG) matters. The aim of our study is to determine the quality of ESG reporting in EU public companies (measured by the ESG-index) and its effect on their market capitalisation. Therefore, the results of our research will be both scientific and applicative, and they will be useful for investors when making investment decisions on the stock exchange. The research includes over 15,000 companies listed on 27 stock exchanges (in the “old” and “new” member states, EU-14 and EU-13, respectively), covering the period 2002 to 2019. The data were obtained from the Refinitiv database. We drew three conclusions after the research. Firstly, only 50% of the companies listed on the stock exchanges in the old EU member states and merely 5% of the companies from the new EU member states had reported ESG-indexes in any year of the research period. Secondly, we found a positive relationship between a company’s market capitalisation and the quality of its ESG reports. Thirdly, the market values of companies are positively but not strongly affected by the ESG-indexes.

Suggested Citation

  • Małgorzata Janicka & Artur Sajnóg, 2022. "The ESG Reporting of EU Public Companies—Does the Company’s Capitalisation Matter?," Sustainability, MDPI, vol. 14(7), pages 1-17, April.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:7:p:4279-:d:786810
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    2. Sabri Boubaker & T.D.Q. Le & R. Manita & T. Ngo, 2023. "The Trade-off Frontier for ESG and Sharpe Ratio: A Bootstrapped Double-Frontier Data Envelopment Analysis," Post-Print hal-04434028, HAL.
    3. Hanna E. Czaja-Cieszyńska & Dominika Kordela, 2023. "Sustainability Reporting in Energy Companies—Is There a Link between Social Disclosures, the Experience and Market Value?," Energies, MDPI, vol. 16(9), pages 1-15, April.
    4. Agus Sugiarto & Ni Nyoman Puspani & Fara Fathia, 2023. "ESG Leverage towards Stock Performance in Indonesia Stock Exchange," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 593-606, September.
    5. Iulia Lupu & Gheorghe Hurduzeu & Radu Lupu, 2022. "How Is the ESG Reflected in European Financial Stability?," Sustainability, MDPI, vol. 14(16), pages 1-14, August.
    6. Zuzanna Zaporowska & Marek Szczepański, 2024. "The Application of Environmental, Social and Governance Standards in Operational Risk Management in SSC in Poland," Sustainability, MDPI, vol. 16(6), pages 1-25, March.
    7. Andreea Larisa Olteanu (Burcă) & Alina Elena Ionașcu & Sorinel Cosma & Corina Aurora Barbu & Alexandra Popa & Corina Georgiana Cioroiu & Shankha Shubhra Goswami, 2024. "Prioritizing the European Investment Sectors Based on Different Economic, Social, and Governance Factors Using a Fuzzy-MEREC-AROMAN Decision-Making Model," Sustainability, MDPI, vol. 16(17), pages 1-46, September.
    8. Agnese, Paolo & De Masi, Francesco & Porretta, Pasqualina & Santoboni, Fabrizio, 2024. "Sustainable or not sustainable pension fund: This is the question. The case of environmental social governance policies in the Italian pension system," Socio-Economic Planning Sciences, Elsevier, vol. 94(C).
    9. Maurizio Comoli & Patrizia Tettamanzi & Michael Murgolo, 2023. "Accounting for ‘ESG’ under Disruptions: A Systematic Literature Network Analysis," Sustainability, MDPI, vol. 15(8), pages 1-32, April.

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