ESG performance and cost of capital: what do we know? Evidence from the US
by Ricky Wong; Hoang Thi My Nguyen; Nana Abena Kwansa
International Journal of Monetary Economics and Finance (IJMEF), Vol. 17, No. 1, 2024

Abstract: This paper empirically examines the impact of environmental, social and governance (ESG) performance and its individual components on the cost of debt and the cost of equity. Using a sample of S&P 500 firms from 2015 to 2021, we find that strong ESG performance reduces the cost of debt and the cost of equity. Furthermore, our analyses on the individual constituents of the ESG performance indicate that firms with high environmental and social performance benefit from both lower cost of debt and cost of equity with the effect more pronounced for cost of equity. The evidence also indicates that high performance in governance only has implications for equity cost of capital. The evidence supports the position that integrating relevant ESG activities in firm business model has capital raising benefits.

Online publication date: Mon, 25-Mar-2024

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Monetary Economics and Finance (IJMEF):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com