Impact of ESG on shareholders’ value creation’

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Provides GCC-specific empirical evidence to the ESG-performance debate.

🏢実務担当者:Highlights that ESG adoption is uneven and may not immediately boost returns; useful for regional sustainability strategy.

🏛政策担当者:Suggests that mandatory ESG disclosure may be needed to accelerate adoption in the Gulf.

Stakeholders of firms are increasingly asking for non-financial performance measures along with financial measures. This additional information helps them make more informed decisions. One such measure is ESG (Environmental, Social, and Governance), which shows the focus of management on broader aspects beyond key activities, such as sustainability practices, social responsibility initiatives, and corporate governance standards. However, there are mixed findings about the impact of ESG on financial performance. There is a dearth of studies on this topic in the context of the GCC (Gulf Cooperation Council) countries; therefore, this study aims to understand the impact of ESG on financial performance in GCC countries. This study analyzed firms listed in the stock exchanges across the GCC and found that of 470 firms, 114 have an ESG score assigned. Adding control variables—ROA, leverage, book-to-price, and cash flow-to-price—the study used panel data analysis to understand the impact of ESG on financial performance, demonstrated by excess returns over risk-free rates. This study found that ESG does not have a significant impact on financial performance, which is not surprising given that earlier studies also reported mixed findings, ranging from positive impacts to no impact and even negative impacts on financial performance. This study also found that ESG adoption varies across the GCC countries and across industries, indicating that some sectors may be more advanced in their ESG practices than others, which could influence overall financial performance and stakeholder perceptions, particularly in industries such as energy and finance where ESG factors are becoming increasingly critical for investment decisions. The main implication of this study is that ESG adoption has a long way to go for firms in the GCC. The need to focus on ESG is necessary as it sends signals about the quality of management of the firm to stakeholders, and considering that most GCC countries are diversifying, this signaling is important.

• semanticscholar https://doi.org/10.3389/frsus.2026.1731752first seen 2026-05-23 05:48:04 · last seen 2026-05-27 05:01:00