The Impact of ESG Ratings on Finnish Stock Market Performance
Padipperuma Arachchige, Imalka Madhushani (2025)
2025
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2025121636978
https://urn.fi/URN:NBN:fi:amk-2025121636978
Tiivistelmä
The study was conducted to determine the relationship between ESG and the stock performance of the Finnish listed companies. An extensive literature review was carried out to develop theoretical grounding and formulate the research hypotheses for the study. The quantitative data analysis was conducted based on the selected 69 Finnish listed firms over six years (2018 – 2023), employing multiple linear regression models that included both aggregated and pillar-wise ESG scores, stock prices, and firm-specific control variables such as total assets, R&D expenditure, and board characteristics.
The results of the study found that the overall ESG score had a significant negative effect on stock prices. Similarly, the environmental (E) and governance (G) pillars also demonstrated a significant negative relationship with the stock price, while the social (S) pillar had no significant impact. According to the findings, the control variable R&D consistently showed a significant positive impact on the stock performance throughout the examined period. Altogether, the results indicated that the ESG commitments were not found to enhance the stock performance among Finnish listed firms. The results of the study contributed to the ongoing discussion about the ESG implications in the capital market and provided practical insights to companies and investors who seek to understand how sustainability initiatives are interpreted in the Finnish stock market.
The results of the study found that the overall ESG score had a significant negative effect on stock prices. Similarly, the environmental (E) and governance (G) pillars also demonstrated a significant negative relationship with the stock price, while the social (S) pillar had no significant impact. According to the findings, the control variable R&D consistently showed a significant positive impact on the stock performance throughout the examined period. Altogether, the results indicated that the ESG commitments were not found to enhance the stock performance among Finnish listed firms. The results of the study contributed to the ongoing discussion about the ESG implications in the capital market and provided practical insights to companies and investors who seek to understand how sustainability initiatives are interpreted in the Finnish stock market.