University of Twente Student Theses


To what extent do ESG scores affect firm valuation? : Evidence based on large Dutch enterprises

Oddo, Renzo (2022) To what extent do ESG scores affect firm valuation? : Evidence based on large Dutch enterprises.

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Abstract:The purpose of this study is to research the impact of environmental, social and governance performance (ESG), divided in each component and evaluate the impact on firm valuation. The study covers a sample selection of companies listed on the Amsterdam Exchange Index (AEX) and Amsterdam Midcap Index (AMX) for the years 2018-2020. A correlation and regression analysis have been carries out to evaluate the possible impact of ESG scores and firm valuation. Data has been gathered by the Asset4 database of Thomson Reuters. The results of this study show higher social score negatively impacting firm valuation. Indicating firm in the Netherlands to be over-invested in the social dimension. There is no significant relationship between environmental score and firm valuation within the sample, environmental scores are embedded in firm valuations. The governance dimension has no effect on firm valuation, because it is difficult to quantify qualitative governance measurements. This study cannot reveal a relationship between ESG controversies and firm valuation. All of the ESG dimensions show significant relationships with firm size, indicating large firms to be more invested in ESG scores. This analysis contributes to the empirical corporate social responsibility (CSR) research. Not only management of the firms but also regulators and researchers are affected by the results. The results state not all investments in ESG performances to be beneficial for economic performances.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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