A study of ESG scores and corporate performance in the Nordics

As ESG practises have sailed up to be at the very top of the business and investment agenda in recent years, claims of its ability to also enhance corporate performance have been adopted by ever more high-profile proponents. This paper sets out to explore the relationship between ESG Scores and Corporate performance in the Nordic region. I use ESG and fundamental firm data collected from the Refinitiv platform for Nordic firms between the years 2007-2020. Where I find economically significant diverging results at the country levels for firm value (Market-to-Book) and economically significant negative results for firm profitability (ROA). I also find diverging statistically significant, albeit economically insignificant, results for both the Nordic in general, and at the country level for several operating measures. My results show that there are regional differences in the results, where more regional research is needed to understand the underlying drivers of ESG and firm performance