Basic Research Question:
The purpose of this paper is to concentrate on environmental, social and governance performance (ESGP) in total and divided in each component and evaluate their impact on financial performance (FINP).
Do ESG activities have a positive impact on a firms performance and do investors recognize these effects and demand a lower rate of return on their investment?
And how does regulation impact these behaviors?
Hypotheses:
H1: ESG factors have a positive effect on the financial performance of a firm
H2: Regulation does impact the effect
H3: Investors recognize ESG activities and demand a lower rate of return