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The impact of ESG reporting on the financial performance of Russian public companies

Author

Listed:
  • Bela S. Bataeva

    (Financial University under the Government of the Russian Federation, Moscow, Russia)

  • Aglaya D. Kokurina

    (National Research University Higher School of Economics, Moscow, Russia)

  • Nikita A. Karpov

    (Benchmark Executive, Moscow, Russia)

Abstract

There is a growing interest in non-financial reporting of public companies, which includes environmental, social and governance (ESG) factors. The paper studies how the degree of ESG disclosure affects corporate performance in Russia. Methodologically, the study relies on the concept of corporate sustainability and stakeholders, according to which ESG reporting increases investors and customers’ confidence in the company and thereby contributes to the growth of profit-based indicators. Among the research methods applied are descriptive, correlation and regression analysis of the relationship between ESG disclosure and return on assets (ROA), equity (ROE) and capital (ROC) of public companies. The sample includes 50 Russian companies whose shares were traded on the Moscow Exchange between 2010 and 2019. The research demonstrates that ESG reporting has a statistically significant positive impact on the financial performance of the companies under review. The degree of this influence is different according to the enterprise’s industry, size and debt level. Moreover, even in similar companies the impact depends on the level of ESG disclosure. The obtained results are of interest primarily to lenders, since the study focuses on financial profit-based indicators, while investors, in addition to traditional analysis, also use value analysis.

Suggested Citation

  • Bela S. Bataeva & Aglaya D. Kokurina & Nikita A. Karpov, 2021. "The impact of ESG reporting on the financial performance of Russian public companies," Upravlenets, Ural State University of Economics, vol. 12(6), pages 20-32, October.
    • Handle: RePEc:url:upravl:v:12:y:2021:i:6:p:20-32
    DOI: 10.29141/2218-5003-2021-12-6-2
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    References listed on IDEAS

    as
    1. Bela S. BATAEVA, 2018. "Stakeholder Engagement: The Case of the Russian Largest Oil and Gas Companies," Upravlenets, Ural State University of Economics, vol. 9(4), pages 20-27, August.
    2. Güler Aras & Aslı Aybars & Ozlem Kutlu, 2010. "Managing corporate performance," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 59(3), pages 229-254, March.
    3. Andrey B. Ankudinov & Idelia R. Badykova, 2020. "Empirical analysis of the relationship between the costs of corporate social responsibility policy implementation and Russian companies’ financial performance," Upravlenets, Ural State University of Economics, vol. 11(2), pages 16-26, April.
    4. Elena A. Fedorova & Lyudmila K. Shiryaeva & Lyubov E. Khrustova & Igor S. Demin & Svetlana V. Ledyaeva, 2020. "Disclosure of environmental information in corporate reports and investment attractiveness of Russian companies," Upravlenets, Ural State University of Economics, vol. 11(5), pages 29-46, November.
    5. Archie B. Carroll, 2016. "Carroll’s pyramid of CSR: taking another look," International Journal of Corporate Social Responsibility, Springer, vol. 1(1), pages 1-8, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Anna I. Izgarova & Elena M. Rogova & Olga V. Bakhareva, 2023. "ESG investment relationship with financial performance of Russian companies," Upravlenets, Ural State University of Economics, vol. 14(3), pages 17-29, July.
    2. Pavel A. Mikhnenko, 2023. "Multimodal business analytics: The concept and its application prospects in economic science and practice," Upravlenets, Ural State University of Economics, vol. 14(6), pages 2-18, December.
    3. Irina S. Belik & Anton S. Dutsinin & Natalia L. Nikulina, 2022. "Financial state and investment attractiveness of Russian public companies: The effect of ESG factors," Upravlenets, Ural State University of Economics, vol. 13(6), pages 44-55, January.

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    More about this item

    Keywords

    sustainable development; corporate social responsibility; corporate sustainability; financial performance; ESG factors; public companies; Russia;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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