Sustainable Finance for a Sustainable Future

Abstract

Because of the growing awareness of environmental stability and country socioeconomic development, the importance of sustainable and responsible investment techniques has increased dramatically. To improve risk management and provide sustainable profits for investors, responsible investment methods take environmental, social, and governance (ESG) factors into account. This paper aims to study on to what extent ESG scores have influence in the financial performance and stock return performance for listed companies in the Eurostoxx50 index. The findings turn out that the statistical regression analysis has not found significant evidence in order to conclude that the higher the ESG Score the higher would be the financial performance or stock return. The study emphasizes the need of sustainability reporting and the shift to the way of investments decision toward sustainability aiming therefore a sustainable future.