Research On The Correlation Between ESG And Corporate Financial Performance

In recent years,with companies trying to enterprise much more economic benefits,they always ignore environmental as well as other key issues,which laid serious risks for the sustainable development of enterprises.As a typical pronoun of green economy,ESG(Environment,social responsibility and corporate governance)investment emphasizes the importance of environment,social responsibility and all stakeholders.However,many enterprises are still worrying that the investment in ESG will affect the business performance of enterprises.Therefore,Is there a correlation between ESG and corporate financial performance? This is actually the purpose of this study.Firstly,this paper expounds the connotations of ESG and financial performance,and puts forward theoretical foundations of ESG.Then it combs the relevant literature,analyzes the development and shortcomings of the existing research,and raises the innovative points of this study.By using the method of principal component analysis,this paper screens the research variables,proposes the research hypothesis and builds the research model accordingly.Finally,this study selects the relevant financial data and ESG data of foreign listed companies in science and technology industry from 2015 to 2017,and tests the model by descriptive analysis,correlation analysis and regression analysis.The main conclusions of this study include:(1)ESG and financial performance show a significant positive correlation in the long term;(2)ESG and financial performance have a positive correlationin the medium term;(3)The correlation between ESG and financial performance is not significantin the short term.