Harmonizing Sustainability Disclosure and Financial Performance. An In-depth Exploration within the European Energy Industry and Beyond



sustainability disclosure; financial performance; environmental, social and governance; energy sector; ESG


This study seeks to investigate how the sustainability disclosure influence the financial performance of companies listed in the Top 100 Global Energy Leaders. The Refinitiv Eikon database in the main source where the data was collected for the 2017-2021 period, resulting in a data set of 361 observations for 71 companies. The analysis examined global and regional variables, and the results obtained using the SPSS statistical package were found to be mixed. The findings revealed that the ESG score had a significant negative impact on both Return on Equity (ROE) and Return on Assets (ROA) for the overall sample and Asia. In contrast, the impact was negative but statistically insignificant for Europe and positive but insignificant for North America. Furthermore, the environmental score had a negatively impact on ROA for the overall sample, while its influence was statistically insignificant in Asia, Europe and North America for both ROA and ROE. Additionally, the social score demonstrated a significant negative impact on the overall sample and Asia, while its impact was not significant in other regions. In terms of governance score, it significantly negatively affected ROE for the overall sample, Asia, and Europe, but had a positive and significant impact in North America. This existing literature in the field is completed in new results from the companies acting in the energy sector in different regions of the world. These findings have also some practical implications, being valuable for stakeholders in the decision-making process and for team management who seek to incorporate sustainable practises into corporate strategies.


Ademi, B., & Klungseth, N. J. (2022). Does it pay to deliver superior ESG performance? Evidence from US S&P 500 companies. Journal of global responsibility, 13(4), 421-449.

Ahmad, N., Mobarek, A., & Roni, N. N. (2021). Revisiting the impact of ESG on financial performance of FTSE350 UK firms: Static and dynamic panel data analysis. Cogent Business & Management, 8(1), 1900500. https://doi.org/ 10.1080/23311975.2021.1900500

Alareeni, B. A., & Hamdan, A. (2020). ESG impact on performance of US S&P 500-listed firms. Corporate Governance: The International Journal of Business in Society, 20(7), 1409-1428. https://doi.org/10.1108/CG-06-2020-0258

Alhawaj, A., Buallay, A., & Abdallah, W. (2023). Sustainability reporting and energy sectorial performance: developed and emerging economies. International Journal of Energy Sector Management, 17(4), 739-760. https://doi.org/10.1108/IJESM-10-2020-0020

Almeyda, R., & Darmansya, A. (2019). The influence of environmental, social, and governance (ESG) disclosure on firm financial performance. IPTEK Journal of Proceedings Series, (5), 278-290.

Alsayegh, M. F., Abdul Rahman, R., & Homayoun, S. (2020). Corporate economic, environmental, and social sustainability performance transformation through ESG disclosure. Sustainability, 12(9), 3910. https://doi.org/10.3390/su12093910

Atan, R., Alam, M. M., Said, J., & Zamri, M. (2018). The impacts of environmental, social, and governance factors on firm performance: Panel study of Malaysian companies. Management of Environmental Quality: An International Journal, 29(2), 182-194. https://doi.org/10.1108/MEQ-03-2017-0033

Baran, M., Kuźniarska, A., Makieła, Z. J., Sławik, A., & Stuss, M. M. (2022). Does ESG reporting relate to corporate financial performance in the context of the energy sector transformation? Evidence from Poland. Energies, 15(2), 477. https://doi.org/10.3390/en15020477

Bătae, O. M., Dragomir, V. D., & Feleagă, L. (2020). Environmental, social, governance (ESG), and financial performance of European banks. Accounting and Management Information Systems, 19(3), 480-501.

Bătae, O. M., Dragomir, V. D., & Feleagă, L. (2021). The relationship between environmental, social, and financial performance in the banking sector: A European study. Journal of Cleaner Production, 290, 125791. https://doi.org/10.1016/j.jclepro.2021.125791

Behl, A., Kumari, P. R., Makhija, H., & Sharma, D. (2022). Exploring the relationship of ESG score and firm value using cross-lagged panel analyses: Case of the Indian energy sector. Annals of Operations Research, 313(1), 231-256. https://doi.org/10.1007/s10479-021-04189-8

Biswas, P. K., Mansi, M., & Pandey, R. (2018). Board composition, sustainability committee and corporate social and environmental performance in Australia. Pacific Accounting Review, 30(4), 517-540. https://doi.org/10.1108/PAR-12-2017-0107

Bruna, M. G., Loprevite, S., Raucci, D., Ricca, B., & Rupo, D. (2022). Investigating the marginal impact of ESG results on corporate financial performance. Finance Research Letters, 47, 102828. https://doi.org/10.1016/j.frl.2022.102828

Buallay, A. (2022). Sustainability reporting in food industry: An innovative tool for enhancing financial performance. British Food Journal, 124(6), 1939-1958. https://doi.org/10.1108/BFJ-01-2021-0053

Buallay, A., Al-Ajmi, J., & Barone, E. (2022). Sustainability engagement’s impact on tourism sector performance: linear and nonlinear models. Journal of Organizational Change Management, 35(2), 361-384. https://doi.org/10.1108/JOCM-10-2020-0308

Carnini Pulino, S., Ciaburri, M., Magnanelli, B. S., & Nasta, L. (2022). Does ESG disclosure influence firm performance? Sustainability, 14(13), 7595. https://doi.org/10.3390/su14137595

Cek, K., & Eyupoglu, S. (2020). Does environmental, social and governance performance influence economic performance? Journal of Business Economics and Management, 21(4), 1165-1184. https://doi.org/10.3846/jbem.2020.12725

Chen, Z., & Xie, G. (2022). ESG disclosure and financial performance: Moderating role of ESG investors. International Review of Financial Analysis, 83, 102291. https://doi.org/10.1016/j.irfa.2022.102291

Chouaibi, S., Chouaibi, J., & Rossi, M. (2022). ESG and corporate financial performance: the mediating role of green innovation: UK common law versus Germany civil law. EuroMed Journal of Business, 17(1), 46-71. https://doi.org/10.1108/EMJB-09-2020-0101

Conca, L., Manta, F., Morrone, D., & Toma, P. (2021). The impact of direct environmental, social, and governance reporting: Empirical evidence in European‐listed companies in the agri‐food sector. Business Strategy and the Environment, 30(2), 1080-1093. https://doi.org/10.1002/bse.2672

Constantinescu, D. (2021). Sustainability disclosure and its impact on firm's value for Energy and Healthcare industry. Central European Economic Journal, 8(55), 313-329. https://doi.org/10.2478/ceej-2021-0022

Constantinescu, D., Caraiania, C., Lungua, C. I., & Mititeana, P. (2021). Environmental, social and governance disclosure associated with the firm value. Evidence from energy industry. Accounting and Management Information Systems, 20(1), 56-75.

DasGupta, R. (2022). Financial performance shortfall, ESG controversies, and ESG performance: Evidence from firms around the world. Finance Research Letters, 46, 102487. https://doi.org/10.1016/j.frl.2021.102487

De Lucia, C., Pazienza, P., & Bartlett, M. (2020). Does good ESG lead to better financial performances by firms? Machine learning and logistic regression models of public enterprises in Europe. Sustainability, 12(13), 5317. https://doi.org/10.3390/su12135317

Duque-Grisales, E., & Aguilera-Caracuel, J. (2021). Environmental, social and governance (ESG) scores and financial performance of multilatinas: Moderating effects of geographic international diversification and financial slack. Journal of Business Ethics, 168(2), 315-334. https://doi.org/10.1007/s10551-019-04177-w

Egorova, A. A., Grishunin, S. V., & Karminsky, A. M. (2022). The Impact of ESG factors on the performance of Information Technology Companies. Procedia Computer Science, 199, 339-345. https://doi.org/10.1016/j.procs.2022.01.041

El Khoury, R., Nasrallah, N., & Alareeni, B. (2023). ESG and financial performance of banks in the MENAT region: concavity–convexity patterns. Journal of Sustainable Finance & Investment, 13(1), 406-430. https://doi.org/10.1080/20430795.2021.1929807

El Khoury, R., Nasrallah, N., & Toumi, A. (2022). ESG and performance in public health-care companies: the role of disclosure and director liability. Competitiveness Review: An International Business Journal, 33(1), 203-221. https://doi.org/10.1108/CR-12-2021-0174

Gholami, A., Murray, P. A., & Sands, J. (2022). Environmental, social, governance & financial performance disclosure for large firms: is this different for SME firms? Sustainability, 14(10), 6019. https://doi.org/10.3390/su14106019

Gholami, A., Sands, J., & Shams, S. (2022). Corporates’ sustainability disclosures impact on cost of capital and idiosyncratic risk. Meditari Accountancy Research, 31(4), 861-886. https://doi.org/10.1108/MEDAR-06-2020-0926

Giannopoulos, G., Kihle Fagernes, R. V., Elmarzouky, M., & Afzal Hossain, K. A. B. M. (2022). The ESG disclosure and the financial performance of Norwegian listed firms. Journal of Risk and Financial Management, 15(6), 237. https://doi.org/10.3390/jrfm15060237

Gjergji, R., Vena, L., Sciascia, S., & Cortesi, A. (2021). The effects of environmental, social and governance disclosure on the cost of capital in small and medium enterprises: The role of family business status. Business strategy and the environment, 30(1), 683-693. https://doi.org/10.1002/bse.2647

Grimaldi, F., Caragnano, A., Zito, M., & Mariani, M. (2020). Sustainability engagement and earnings management: The Italian context. Sustainability, 12(12), 4881. https://doi.org/10.3390/su12124881

Hwang, J., Kim, H., & Jung, D. (2021). The effect of ESG activities on financial performance during the covid-19 pandemic—evidence from Korea. Sustainability, 13(20), 11362. https://doi.org/10.3390/su132011362

In, S. Y., Rook, D., & Monk, A. (2019). Integrating alternative data (also known as ESG data) in investment decision making. Global Economic Review, 48(3), 237-260. https://doi.org/10.1080/1226508X.2019.1643059

Johnson, R. (2020). The link between environmental, social and corporate governance disclosure and the cost of capital in South Africa. Journal of Economic and Financial Sciences, 13(1), 12. https://doi.org/10.4102/jef.v13i1.543

Kim, S., & Li, Z. (2021). Understanding the impact of ESG practices in corporate finance. Sustainability, 13(7), 3746. https://doi.org/10.3390/su13073746

Kumar, P., & Firoz, M. (2022). Does accounting-based financial performance value environmental, social and governance (ESG) disclosures? A detailed note on a corporate sustainability perspective. Australasian Accounting, Business and Finance Journal, 16(1), 41-72. http://dx.doi.org/10.14453/aabfj.v16i1.4

Lee, S. P., & Isa, M. (2023). Environmental, social and governance (ESG) practices and financial performance of Shariah-compliant companies in Malaysia. Journal of Islamic Accounting and Business Research, 14(2), 295-314. https://doi.org/10.1108/JIABR-06-2020-0183

Lungu, C. I., Caraiani, C., & Dascălu, C. (2019, June). Multidisciplinary approach of sustainable performance - Financial performance nexus. The perspective of energy industry corporations. In Proceedings of the 14th international conference accounting and management information systems (AMIS IAAER 2019) (pp. 365-387).

Minutolo, M. C., Kristjanpoller, W. D., & Stakeley, J. (2019). Exploring environmental, social, and governance disclosure effects on the S&P 500 financial performance. Business Strategy and the Environment, 28(6), 1083-1095. https://doi.org/10.1002/bse.2303

Mititean, P. (2022). Is the financial performance affected by board characteristics during Covid-19? Evidence from the energy industry. Oradea Journal of Business and Economics, 7(Special), 100-110.

Mititean, P. (2023a). Sustainability disclosure and corporate performance: a European evidence from agriculture industry. Scientific Papers Series Management, Economic Engineering in Agriculture & Rural Development, 23(1), 415-423.

Mititean, P. (2023b). Board attributes and social and environmental performance. Evidence from the energy sector. Journal of Accounting and Management Information Systems, 22(1), 130-146.

Mititean, P., & Sărmaș, N. F. (2023). The Relationship Between Sustainability Reporting and Corporate Performance. Evidence from the European Energy Sector. CECCAR Business Review, 4(6), 1-11.

Naeem, N., & Cankaya, S. (2022). The impact of ESG performance over financial performance: A study on global energy and power generation companies. International Journal of Commerce and Finance, 8(1), 1-25.

Nguyen, D. T., Hoang, T. G., & Tran, H. G. (2022). Help or hurt? The impact of ESG on firm performance in S&P 500 non-financial firms. Australasian Accounting, Business and Finance Journal, 16(2), 91-102. http://dx.doi.org/10.14453/aabfj.v16i2.7

Orazalin, N., & Baydauletov, M. (2020). Corporate social responsibility strategy and corporate environmental and social performance: The moderating role of board gender diversity. Corporate Social Responsibility and Environmental Management, 27(4), 1664-1676. https://doi.org/10.1002/csr.1915

Orazalin, N., & Mahmood, M. (2021). Toward sustainable development: Board characteristics, country governance quality, and environmental performance. Business Strategy and the Environment, 30(8), 3569-3588. https://doi.org/10.1002/bse.2820

Orazalin, N. (2020). Do board sustainability committees contribute to corporate environmental and social performance? The mediating role of corporate social responsibility strategy. Business Strategy and the Environment, 29(1), 140-153. https://doi.org/10.1002/bse.2354

Park, S. R., & Jang, J. Y. (2021). The impact of ESG management on investment decision: Institutional investors’ perceptions of country-specific ESG criteria. International Journal of Financial Studies, 9(3), 48. https://doi.org/10.3390/ijfs9030048

Petitjean, M. (2019). Eco-friendly policies and financial performance: Was the financial crisis a game changer for large US companies? Energy Economics, 80, 502-511. https://doi.org/10.1016/j.eneco.2019.01.028

Qureshi, M. A., Kirkerud, S., Theresa, K., & Ahsan, T. (2020). The impact of sustainability (environmental, social, and governance) disclosure and board diversity on firm value: The moderating role of industry sensitivity. Business Strategy and the Environment, 29(3), 1199-1214. https://doi.org/10.1002/bse.2427

Radu, C., Smaili, N., & Constantinescu, A. (2022). The impact of the board of directors on corporate social performance: a multivariate approach. Journal of Applied Accounting Research, 23(5), 1135-1156. https://doi.org/10.1108/JAAR-05-2021-0141

Rahi, A. F., Akter, R., & Johansson, J. (2021). Do sustainability practices influence financial performance? Evidence from the Nordic financial industry. Accounting Research Journal, 35(2), 292-314. https://doi.org/10.1108/ARJ-12-2020-0373

Refinitiv Eikon (2022), Environmental, social and governance scores from Refinitiv. https://www.refinitiv.com/content/dam/marketing/en_us/documents/methodology/refinitiv-esg-scores-methodology.pdf

Sassen, R., Hinze, A. K., & Hardeck, I. (2016). Impact of ESG factors on firm risk in Europe. Journal of business economics, 86, 867-904.

Saygili, E., Arslan, S., & Birkan, A. O. (2022). ESG practices and corporate financial performance: Evidence from Borsa Istanbul. Borsa Istanbul Review, 22(3), 525-533. https://doi.org/10.1016/j.bir.2021.07.001

Shakil, M. H., Mahmood, N., Tasnia, M., & Munim, Z. H. (2019). Do environmental, social and governance performance affect the financial performance of banks? A cross-country study of emerging market banks. Management of Environmental Quality: An International Journal, 30(6), 1331-1344. https://doi.org/10.1108/MEQ-08-2018-0155

Velayutham, E. (2018). Sustainability disclosure and earnings management. https://doi.org/10.4337/9781786432636.00037

Velte, P. (2017). Does ESG performance have an impact on financial performance? Evidence from Germany. Journal of Global Responsibility, 8(2), 169-178. https://doi.org/10.1108/JGR-11-2016-0029

Whelan, T., Atz, U., Van Holt, T., & Clark, C. (2021). ESG and financial performance: Uncovering the relationship by aggregating evidence from 1,000 plus studies published between 2015-2020. NYU STERN Center for sustainable business.

Yoo, S., & Managi, S. (2022). Disclosure or action: Evaluating ESG behavior towards financial performance. Finance Research Letters, 44, 102108. https://doi.org/10.1016/j.frl.2021.102108

Young-Ferris, A., & Roberts, J. (2023). ‘Looking for something that isn’t there’: a case study of an early attempt at ESG integration in investment decision making. European Accounting Review, 32(3), 717-744. https://doi.org/10.1080/09638180.2021.2000458

Zhou, G., Liu, L., & Luo, S. (2022). Sustainable development, ESG performance and company market value: Mediating effect of financial performance. Business Strategy and the Environment, 31(7), 3371-3387. https://doi.org/10.1002/bse.3089




How to Cite

MITITEAN, P., & SĂRMAȘ, F.-N. (2023). Harmonizing Sustainability Disclosure and Financial Performance. An In-depth Exploration within the European Energy Industry and Beyond. Management Dynamics in the Knowledge Economy, 11(4), 385–401. Retrieved from https://www.managementdynamics.ro/index.php/journal/article/view/548