The Impact of Environmental, Social and Governance (ESG) index in Climate change on Corporates Performance in Egypt: An Exploratory analysis on EGX100
DOI:
https://doi.org/10.56830/IJAMS07202503Keywords:
ESG Index, Climate Change Policy, Corporate Performance, ROA, ROE, EPS, EGX100, Egypt, Sustainability, Emerging MarketsAbstract
The research examines how climate change policy implemented as Environmental Social Governance (ESG) indexes affects financial results of EGX100 listed corporations in Egypt. Research examines ESG index metrics integrated into national climate policies to study financial results affecting ROA and ROE with EPS as a central variable in emerging market analysis. The study uses quantitative research methods to investigate data collected from 2017 to 2023 by studying companies that appeared on the EGX100 without interruption. Research data consisting of financial information originated from corporate annual reports alongside ESG scores that emerged from dependable online platform sources. The STATA software was employed to evaluate ESG indices and corporate financial performance through Ordinary Least Squares (OLS) regression analysis with correlation and diagnostic tests. Results demonstrate how higher ESG compliance leads to positive associations with both ROA and ROE metrics thus demonstrating improved corporate profitability and shareholder value. ESG appears to have a positive connection with EPS nonetheless this relationship showed reduced strength. Firm size together with capital adequacy ratio (CAR) and gross profit margin (GPM) proved to affect the company financial results. The research data demonstrates that ESG practices lead to sustainable financial performances in Egyptian corporate organizations. The conducted study expands knowledge about how ESG compliance along with climate policy implementation affects corporate financial results in developing nations. This investigation serves as one of the initial studies to analyze this relationship in the Egyptian market thereby delivering valuable practical and theoretical contributions to policymakers and investors and corporate executives handling climate financial challenges.
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