Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/329808 
Year of Publication: 
2025
Citation: 
[Journal:] Corporate Social Responsibility and Environmental Management [ISSN:] 1535-3966 [Volume:] 32 [Issue:] 5 [Publisher:] John Wiley & Sons, Inc. [Place:] Chichester, UK [Year:] 2025 [Pages:] 6377-6401
Publisher: 
John Wiley & Sons, Inc., Chichester, UK
Abstract: 
This empirical study analyzes the relationship between a company's financial distress obtained from a bankruptcy prediction model and ESG scores from Refinitiv, MSCI, ESG Book, and Moody's ESG. Applying a nonparametric regression technique on panel data of listed US companies for 2003–2022 reveals a pronounced and statistically significant U‐shaped relationship between financial distress and ESG scores. Financially distressed companies exhibit high ESG scores. Further empirical analysis shows that the most plausible interpretation is that companies anticipate their upcoming financial distress and intensify ESG‐supporting disclosures to manage their ESG scores upward. The empirical results underline the importance of including the financial health of a company in ESG assessments. Only by taking into account both the ESG performance and the financial sustainability of a company is it possible to assess responsible corporate governance.
Subjects: 
ESG
ESG score
financial distress
nonparametric regression
shareholder‐stakeholder orientation
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.