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Renewable energy

Renewable Energy and ESG Disclosure: A Crucial Balance

Strategic Insights

— 1 min read

A new study on renewable energy aims to understand the interplay between environmental, social, and governance (ESG) disclosure and financial performance, particularly in the era of Industry 5.0. The research highlights the importance of embracing ESG disclosure to mitigate climate change and enhance financial outcomes. The study utilized a panel data sample from 2015-2021, covering 41 renewable and clean energy companies, to explore how ESG disclosure influences financial performance. The findings suggest a positive relationship between ESG disclosure and financial performance, with firm-specific characteristics playing a significant role in this relationship.

Key Takeaways:

  • The study emphasizes the significance of ESG disclosure in the era of Industry 5.0, aiming to mitigate climate change and enhance financial outcomes.
  • The research analyzed a panel data sample from 2015-2021, covering 41 renewable and clean energy companies.
  • The study applies a two-step approach, combining ESG-FP analysis with K-means++ clustering to account for firm-specific characteristics.
  • The findings indicate a positive relationship between ESG disclosure and financial performance, with a significant impact of individual E and S disclosure on FP.
  • Firm-specific characteristics significantly influence the relationship between ESG disclosure and FP.
  • The study offers valuable insights for businesses and policymakers in developing strategies that improve profitability while addressing climate change risks.

Statistics:

  • 41 renewable and clean energy companies were included in the panel data sample.
  • The study covered a time period of 2015-2021.
  • The research applied the K-means++ clustering technique to explore the influence of firm-specific features on the relationship between ESG disclosure and FP.
  • The study utilized the Bloomberg database and audited financial reports to gather data.

Sources:

  • A quantitative analysis of ESG disclosure and financial performance in renewable energy companies: a two-step approach using unsupervised machine learning. International Journal of Energy Sector Management, 2024,19(5).
  • Emerald (publisher)
  • DOI: https://doi-org.sdpl.idm.oclc.org/10.1108/ijesm-08-2024-0039 (free journal article)

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