The Financial Impact Of Incorporating Environmental, Social and Governance Performance Indicators Into Capital Investment Hiring
DOI:
https://doi.org/10.61173/kwh53498Keywords:
ESG performance, capital investment, executive incentives, enterprise digital transformationAbstract
As the concept of sustainable development deepens, academics are beginning to recognize the financial impact of environmental, social,and governance (ESG) performance on capital investment. This article examines the financial impact of incorporating ESG into capital investment hiring by examining real-world cases and literature. Based on the findings, this article recommends that companies incorporate ESG indicators into capital investment hiring to promote green innovation. Investors should also integrate ESG and revise traditional valuation models. This article proposes that the quantitative characteristics of ESG (such as carbon emissions data) are more applicable to investment decisions in the capital market. Furthermore, this article’s industry analysis shows that environmental performance (E) in the manufacturing industry has the most significant financial impact, while governance performance (G) in the financial industry is even more critical. This research provides a theoretical framework for balancing ESG investment and financial objectives and points to the need for further empirical analysis of the dynamic effects of ESG using long-term panel data.
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