The Impact of Esg on the Financial Performance of Jse-Listed Companies

The purpose of the study was to understand the impact of environmental, social, and corporate governance on the financial performance of JSE-listed firms in South Africa. The study utilised the JSE Top 40 firms for the period from 2002 to 2022. Furthermore, the study employed a two-step system Generalised Method of Moments, to estimate the impact of total ESG and individual dimensions of ESG on firm financial performance. Additionally, the study examined the moderating effects of firm size on the relationship between financial performance and ESG. The results revealed a positive and significant relationship between total ESG and firm financial performance. However, the findings regarding individual ESG dimensions and firm performance are mixed. Firm size has a moderating effect on the relationship between ESG and firm financial performance. The implication of these findings for South Africa is increased foreign direct investment from green investors and listed firms seriously considering ESG in their operations.