Undergraduate Honors Thesis Projects
Date of Award
Spring 4-23-2020
Document Type
Honors Paper
Degree Name
Business Analytics-BS
Department
Business, Accounting, & Economics
Advisor
Dr. Kyriacos Aristotelous
First Committee Member
Dr. Dennis Whalen
Second Committee Member
Dr. John Tansey
Keywords
Environmental Social Governance (ESG) Investing, Stock Return, Regression Analysis, Sustainability, Business Analytics, Econometrics
Subject Categories
Business Administration, Management, and Operations | Business Analytics | Business Intelligence | Business Law, Public Responsibility, and Ethics | Finance and Financial Management
Abstract
Using a random sample of 184 companies traded on the New York Stock Exchange in 2019, this paper investigates the impact of Environmental, Social, Governance (ESG) investing on a company’s stock return. The results show that ESG investing has a positive and statistically significant impact on a company’s stock return. An increase in one ESG rating leads to an increase between 0.4% and 3.6% in the return of a company’s stock. Additionally, the results show that individual ESG factors are each statistically insignificant. This indicates that the three ESG factors need to be viewed together rather than individually. Lastly, the results show that a five-year average ESG rating has a statistically insignificant effect on stock returns, showing that ESG investing only has a positive and significant impact on stock returns in a one-year time period.
Recommended Citation
Marty, Sam, "An Examination of How Environmental, Social, Governance (ESG) Investing Influences a Company's Stock Return" (2020). Undergraduate Honors Thesis Projects. 95.
https://digitalcommons.otterbein.edu/stu_honor/95
Included in
Business Administration, Management, and Operations Commons, Business Analytics Commons, Business Intelligence Commons, Business Law, Public Responsibility, and Ethics Commons, Finance and Financial Management Commons