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The Impact of Sustainable Investing on Financial Performance

Author

Listed:
  • Hanan Amin Barakat
  • Nadine Hossam
  • Nour Tarek
  • Sara Mohamed
  • Jana Emad

Abstract

This research project investigates the impact of sustainable investing on financial performance within the Egyptian market, focusing on a selected group of twelve companies listed on the Egyptian Exchange (EGX) that meet predetermined environmental, social, and governance (ESG) criteria. The study addresses the gap in the existing literature by examining the specific relationship between sustainable investment and financial performance in the Egyptian context, within the period of 2018 to 2022. Regression models employed to examine the statistical association between sustainable investment practices and financial performance indicators, while correlation analysis helps to identify the strength and direction of the relationship. Revenue Growth and Total Debt to Equity were used as control variables. The main results of the research project state that there is an impact of sustainable investment on some financial performance of the Egyptian companies listed in ESG index. Study results show that there is no significant relationship between ESG factors and some indicators like current ratio, cash ratio, operating cash flow, debt ratio, turnover ratio, gross margin ratio, Tobin Q, and assets growth. However, it showed that there is a positive correlation between corporate social responsibilities (CSR) or ESG factors and financial performance measures like return on assets (ROA), return on equity (ROE), and return on sales (ROS).

Suggested Citation

  • Hanan Amin Barakat & Nadine Hossam & Nour Tarek & Sara Mohamed & Jana Emad, 2024. "The Impact of Sustainable Investing on Financial Performance," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 16(7), pages 1-86, July.
    • Handle: RePEc:ibn:ijefaa:v:16:y:2024:i:7:p:86
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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