Volume 20, Number 1, June 2025
| Environmental, Social, and Governance Ratings and Systematic Risk |
Abstract
This paper examines the relationship between corporate environmental, social, and governance (ESG) performance and systematic risk. Using a sample of firms listed in Taiwan from 2016 to 2022 and controlling for influencing factors, the results show a significantly negative relationship between ESG ratings and systematic risk. The evidence suggests that firms with stronger ESG performance exhibit lower systematic risk. The results are robust to alternative measures of ESG performance. Additionally, our findings provide policy implications for regulatory requirements for sustainability development and ESG disclosures and reporting.
Keywords: Sustainability, Corporate Social Responsibility, ESG
JEL Classification: O32, M40, M42