ECONOMIC AND MATHEMATICAL ANALYSIS OF FACTORS INFLUENCING THE ESG- RATING COMPONENTS OF THE COMPANIES ON THE EMERGING MARKETS

Abstract

Objective: Nowadays, ESG serves as a guide for any kind of business all around the world. Over the last three years, ESG agenda developed at a more rapid pace on the emerging markets than on the developed ones. Methods: Utilizing data from 200 companies from 8 different industries: chemical, energy, transport, metals and mining, telecommunication, oil and gas, real estate, and retail trade industries, authors employs correlation and regression analyses to ascertain the effects of ESG factors on companies' profitability and investment attractiveness. Results: It can be stated that components of an ESG rating can affect a company’s financial performance, such as profitability and the company’s investment attractiveness with different magnitude and any changes (increase or decrease) in E, S or G components can influence company financial performance: either in positive or negative way. Conclusion: The study concludes that while ESG factors generally contribute to improved financial outcomes, their specific impact varies across different industries, highlighting the importance of industry-specific strategies for integrating ESG considerations into business practices.