New Research Reaffirms Link Between ESG Practices and Financial Performance in Nordic Companies (Dissertation: MSc Habeeb Yahya, 24.5.2024, Accounting and Finance)
As global awareness of environmental, social, and governance (ESG) activities continues to rise, a recent research sheds light on the crucial role these practices play in shaping the performance and value of companies, particularly in Nordic countries.
Doctoral researcher Habeeb Yahya from the University of Turku recently completed doctoral research exploring the relationship between companies' ESG practices and their financial performance within the Nordic region. The study, conducted on data from 2010 through to 2021, delved into the complexities of this relationship, considering factors such as industry dynamics, regional variations, and ownership structure.
"Importantly, my research highlights that ESG practices are both a consequence and a catalyst of firm financial performance. It illustrates how prioritizing ESG considerations leads to stronger financial performance, while financial success enables further investment in ESG initiatives", fostering a virtuous cycle of value creation, says Yahya.
Contrary to the mixed findings in existing literature, Yahya's research serves to reinforce the consensus on the significant role that ESG activities play in shaping companies' financial performance and investor valuation. By analyzing data from Nordic companies across various sectors and ownership structures, the study highlights the consistent benefits of prioritizing sustainability efforts. Even amid unprecedented challenges such as the COVID-19 pandemic, these companies exhibited resilience and continued to thrive, underscoring the enduring value of sustainability practices in driving long-term success.
Of particular interest is Yahya's exploration of the influence of ownership structure on ESG performance, indicating that companies with long-term owners who prioritize sustainability tend to excel in ESG areas. This finding highlights the importance of aligning investor interests with sustainable business strategies and signals the potential for positive outcomes when sustainability is integrated into long-term investment approaches.
Yahya's dissertation not only contributes to academic understanding but also offers practical insights for companies and investors. It emphasizes the critical role of ESG activities in driving financial performance and investor valuation, particularly in the esteemed Nordic context, showcasing the necessity for sustainable business practices in today's global economy.
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MSc Habeeb Yahya defends the dissertation in Accounting and Finance titled “ESG AND FINANCIAL PERFORMANCE OF FIRMS: NORDIC EVIDENCE” at the University of Turku on 24 May 2024 at 12.00 (Turku School of Economics, Lähitapiola Lecture Hall, Rehtoripellonkatu 3, Turku).
The audience can participate in the defence by remote access.
Opponent: Professor Sami Vähämaa (University of Vaasa)
Custos: Professor Mika Vaihekoski (University of Turku)
