THE ROLE OF ESG FACTORS IN INVESTMENT DECISION MAKING AND CORPORATE FINANCIAL PERFORMANCE
DOI:
https://doi.org/10.5281/zenodo.19997377Keywords:
ESG factors, sustainable investing, corporate financial performance, investment decision-making, ESG disclosure, meta-analysis, responsible investment, firm value.Abstract
Environmental, Social, and Governance (ESG) factors have become central to modern investment strategies and corporate management. This paper reviews the role of ESG in investment decision-making and its impact on corporate financial performance (CFP) based on recent literature and meta-analyses. The findings generally indicate a positive relationship between strong ESG practices and corporate metrics such as ROA, ROE, firm value, and risk reduction, while portfolio-level investment returns tend to be neutral to slightly positive. Practical implications for investors and companies are discussed.
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