Impact of ESG-Driven Spending on Financial Performance in Sensitive Sectors

We have analyze the impact of Environmental, Social, and Governance (ESG) factors on financial performance, specifically measured through Market Value, within the context of US Markets utilizing financial data from firms listed on the US S&P 500 index focusing on erergy stocks over the decade spanning 2015 to 2023. The findings derived from the Structural equation modelling using smart pls indicate that, is implemented to assess the indicated linkages.The results demonstrate significant positive correlations between capital expenditure, ESG Factors and market value. Although no direct link between environmental factors and revenue was identified, capital expenditure and enterprise disclosure scores showed a positive significance. Additionally, the Capital spending impacts on ESG with mediating sales revenue have positive significant .This investigation enriches the available knowledge on ESG influences and the effectiveness of energy enterprises by underlining the importance of financial outlay in this vital area. It challenges the conventional perspective of ESG as isolated variables and proposes a potential positive effect on financial performance. The findings suggest that policymakers can promote sustainable practices by monitoring capital expenditure and enhancing market value. Investors may leverage this knowledge to make better-informed decisions regarding firms dedicated to spending. Energy companies can enhance their market value by prioritizing environmental initiatives. JEL Codes :-Q01,M14,G30,G32,G39