How environmental, social, and governance disclosure promotes sales? Empirical evidence from global firms

This paper investigates the influence of environmental (E), social (S) and governance (G) disclosure, and composite ESG on sales performance. The study analyses 826 global firms across 7 years spanning the 2008 financial crisis to understand how firms use ESG to promote sales in normal and disruptive periods. The effects of ESG and S alone on sales are significantly positive, while no significant effect of E and/or G is found. ESG has a significant effect on sales in the time of market turbulence, but the effect is not robust in normal time. The interaction of E*S/E*G/S*G is also analysed. Even the effect of E alone on sales tends to be negative, the interactive effect of S and E positively affects sales. This paper is among the first to investigate the influence of ESG in whole or in part on sales, taking into account a contextual factor, i.e. market turbulence time.