Analysis of the impact of the ESG rating on finantial performance in companies in the energy sector

Identifier:  TFM:1801

Handle: https://hdl.handle.net/20.500.11797/TFM1801

Authors:  Ferré Roca, Martí

Abstract:
Sustainability in companies has become very important in recent years. Institutions, both national and international, encourage companies to devote resources and time, so much so that the European Union has increased the publication of legislation related to the subject. The environmental, social and governance rating (ESG) quantifies this sustainability. The objective of the following project is to analyse the impact of the score of this rating towards the financial performance of companies. To do this, a total of thirty-eight companies have been analysed, distributed in four portfolios, ordered according to the ESG rating and, the minimum risk and the Sharpe ratio have been calculated. The results obtained show how the portfolio made up of companies with lower ESG rating has lower variance than the other three portfolios, determining the same expected profitability in all of them. A positive relationship between the two terms is ruled out, and there are not enough arguments to determine whether it is a negative or simply non-existent relationship.