Examining the Effect of COVID-19 on ESG Performance & Financial Resilience
Summary
Environmental Social & Governance (ESG) performance present a mixed impact on firms’ financial resilience during the COVID-19 pandemic, with notable regional differences in Europe. This study analyzes 200 firms between 2017 and 2023 using Difference-in-Difference (DD) and Difference-in-Difference-in-Differences (DDD) within a panel data framework. Findings reveal that ESG scores do not consistently predict short-term financial resilience, although a stronger positive correlation between ESG performance and financial resilience exist, particularly in Northern Europe in comparison to Southern Europe during COVID-19. These results underscore the strategic importance of ESG investments in economic hardships, emphasizing regional benefits within a European context.