會計審計論叢 Review of Accounting and Auditing Studies

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RAAS 2023/12
Vol.13 No.2: 1-40

The Relation between ESG Performance and Firm Performance under SASB

Kuei Hui Cheng¹, Wan-Ying Lin^2*, and Jui-Chih Wang³
¹Department of Accounting, National Taipei University
²Department of Accounting, National Chengchi University
³Department of Accounting Information, National Taipei University of Business

Abstract: Based on the scores and ratings related to the evaluation of ESG material issues under SASB disclosure framework, this study employs a 2SLS model to investigate whether ESG performance enhances firm performance (ROA and ROE) or the other way around by using a sample of Taiwan listed companies over the period of 2018 to 2020. We cannot find evidence that ESG performance (measured in terms of scores and ratings) helps enhance the performance of the firm. However, the empirical results indicate that firm performance is significantly and positively related to ESG performance (both ESG scores and ratings). The findings thus support the slack resources theory that firms with better profitability are more able to commit to their sustainability activities. Due to that the benefits of ESG activities may not have immediate effects, we conduct additional tests by adopting lagged variables of ESG performance or firm performance. The main findings remain consistent.

Keywords: SASB; ESG; CSR; Financial performance

* Corresponding author ; e-mail: wyinglin@nccu.edu.tw

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