THE EFFECT OF ESG CRITERIA ON STOCK PRICE

Finance

This study investigates whether strong performance on Environmental, Social and Governance (ESG) criteria is reflected in the share prices of large-capitalisation firms listed on the New York Stock Exchange (NYSE). Using annual data for the 50 largest NYSE companies over 2014 – 2023, we construct a balanced panel with end-of-year market prices and conventional financial controls. Panel-data regressions are estimated sequentially with pooled OLS, fixed- and random-effects specifications; diagnostic tests indicate heteroskedasticity and serial correlation, so the final inference relies on feasible generalized least squares (FGLS). Aggregate ESG scores show a positive, significant link to stock prices; governance exerts the strongest influence, environmental factors follow, and social effects are weaker.

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