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Does ESG performance have an impact on financial performance? Evidence from Germany

Patrick Velte (Institute of Finance and Accounting, Leuphana University of Lueneburg, Lueneberg, Germany)

Journal of Global Responsibility

ISSN: 2041-2568

Article publication date: 13 June 2017

Issue publication date: 29 August 2017




The purpose of this paper is to concentrate on environmental, social and governance performance (ESGP) in total and divided in each component and evaluate their impact on financial performance (FINP).


The study covers a sample selection of companies listed on the German Prime Standard (DAX30, TecDAX, MDAX) for the business years 2010-2014 (412 firm-year observations). A correlation and regression analysis was carried out to evaluate possible links between ESGP as determined by the Asset4 database of Thomson Reuters and accounting and market-based measures of FINP (Return on Assets [ROA] and Tobin’s Q).


ESGP has a positive impact on ROA but no impact on Tobin’s Q. Furthermore, by analyzing the three different components of ESGP, governance performance has the strongest impact on FINP in comparison to environmental and social performance.


The analysis makes a key contribution to the empirical corporate social responsibility (CSR) research as the author breaks down ESGP into their three components and include both accounting-based and market-based FINP measures for the German setting for the first time. Not only companies but also regulators and researchers are affected by the notion that CSR and FINP are close together and should be lead to a successful stakeholder management.



Velte, P. (2017), "Does ESG performance have an impact on financial performance? Evidence from Germany", Journal of Global Responsibility, Vol. 8 No. 2, pp. 169-178.



Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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