Sustainability crisis: A correlation analysis between ESG risk rate and public listed corporate financial performance in Ireland and UK.

Abstract

The concept of sustainability has gained significant attention in recent years as societies face pressing environmental and social challenges. This study explores the relationship between sustainability performance, a measured by environmental, social, and governance (ESG) risk rates, and the financial performance of public listed corporations in Ireland and the United Kingdom (UK). The objective is to assess whether there exists a correlation between ESG risk rates and corporate financial performance.

The findings of this study reveal a significant correlation in most of the ESG components in a analyse per component and a strong correlation in a added together analyse against financial performance indicators. Companies with lower ESG risk rates tend to exhibit better financial performance, however in terms of stock price fluctuation the study reveals that there is not much impact between companies with lower and severe ESG risk rate. These results suggest that sustainable practices and a strong ESG performance positively impact financial outcomes for public listed corporations in Ireland and the UK market.