ON THE RELATIONSHIP BETWEEN FINANCIAL AND SUSTAINABLE VARIABLES: INSIGHTS FROM GRAPHICAL GAUSSIAN MODEL
In recent years, attention toward Environmental, Social and Governance (ESG) issues has become increasingly important in the investment decision-making process, prompting interest of investors, companies, regulators and researchers on the possible relationships between financial performances and sus...
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| Format: | Article |
| Language: | English |
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World Scientific Publishing
2024-12-01
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| Series: | Journal of Financial Management, Markets and Institutions |
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| Online Access: | https://www.worldscientific.com/doi/10.1142/S2282717X24300010 |
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| author | CARMINE DA FERMO PAOLA MUSILE TANZI MARCO NICOLOSI ELENA STANGHELLINI |
| author_facet | CARMINE DA FERMO PAOLA MUSILE TANZI MARCO NICOLOSI ELENA STANGHELLINI |
| author_sort | CARMINE DA FERMO |
| collection | DOAJ |
| description | In recent years, attention toward Environmental, Social and Governance (ESG) issues has become increasingly important in the investment decision-making process, prompting interest of investors, companies, regulators and researchers on the possible relationships between financial performances and sustainable variables. With the aim to increase our understanding of these relationships, we use a graphical modeling approach on the MSCI and Bloomberg sustainable dataset for years from 2017 to 2021. Our analysis shows that companies with a higher level of compliance with ESG standards have lower assets’ volatility than others and are not penalized in terms of returns. Furthermore, the increasing level of mandatory disclosure within the European area, induced by the current regulation, has reduced the strength of the positive relationship between Disclosure Score and ESG Score. Moreover, the negative relationship between ESG Score and volatility remains consistent across temporal and geographic areas. |
| format | Article |
| id | doaj-art-6b05b0b664fd4808bd6651c32f9c14da |
| institution | Kabale University |
| issn | 2282-717X |
| language | English |
| publishDate | 2024-12-01 |
| publisher | World Scientific Publishing |
| record_format | Article |
| series | Journal of Financial Management, Markets and Institutions |
| spelling | doaj-art-6b05b0b664fd4808bd6651c32f9c14da2025-01-24T09:32:04ZengWorld Scientific PublishingJournal of Financial Management, Markets and Institutions2282-717X2024-12-01120210.1142/S2282717X24300010ON THE RELATIONSHIP BETWEEN FINANCIAL AND SUSTAINABLE VARIABLES: INSIGHTS FROM GRAPHICAL GAUSSIAN MODELCARMINE DA FERMO0PAOLA MUSILE TANZI1MARCO NICOLOSI2ELENA STANGHELLINI3Sella SGR, Milan 20124, ItalyDepartment of Economics, University of Perugia, Perugia 06123, ItalyDepartment of Human Sciences, Link Campus University, Rome 00165, ItalyDepartment of Economics, University of Perugia, Perugia 06123, ItalyIn recent years, attention toward Environmental, Social and Governance (ESG) issues has become increasingly important in the investment decision-making process, prompting interest of investors, companies, regulators and researchers on the possible relationships between financial performances and sustainable variables. With the aim to increase our understanding of these relationships, we use a graphical modeling approach on the MSCI and Bloomberg sustainable dataset for years from 2017 to 2021. Our analysis shows that companies with a higher level of compliance with ESG standards have lower assets’ volatility than others and are not penalized in terms of returns. Furthermore, the increasing level of mandatory disclosure within the European area, induced by the current regulation, has reduced the strength of the positive relationship between Disclosure Score and ESG Score. Moreover, the negative relationship between ESG Score and volatility remains consistent across temporal and geographic areas.https://www.worldscientific.com/doi/10.1142/S2282717X24300010ESG disclosuregraphical Gaussian modelsocially responsible investmentssustainabilitysustainable investmentspartial correlation |
| spellingShingle | CARMINE DA FERMO PAOLA MUSILE TANZI MARCO NICOLOSI ELENA STANGHELLINI ON THE RELATIONSHIP BETWEEN FINANCIAL AND SUSTAINABLE VARIABLES: INSIGHTS FROM GRAPHICAL GAUSSIAN MODEL Journal of Financial Management, Markets and Institutions ESG disclosure graphical Gaussian model socially responsible investments sustainability sustainable investments partial correlation |
| title | ON THE RELATIONSHIP BETWEEN FINANCIAL AND SUSTAINABLE VARIABLES: INSIGHTS FROM GRAPHICAL GAUSSIAN MODEL |
| title_full | ON THE RELATIONSHIP BETWEEN FINANCIAL AND SUSTAINABLE VARIABLES: INSIGHTS FROM GRAPHICAL GAUSSIAN MODEL |
| title_fullStr | ON THE RELATIONSHIP BETWEEN FINANCIAL AND SUSTAINABLE VARIABLES: INSIGHTS FROM GRAPHICAL GAUSSIAN MODEL |
| title_full_unstemmed | ON THE RELATIONSHIP BETWEEN FINANCIAL AND SUSTAINABLE VARIABLES: INSIGHTS FROM GRAPHICAL GAUSSIAN MODEL |
| title_short | ON THE RELATIONSHIP BETWEEN FINANCIAL AND SUSTAINABLE VARIABLES: INSIGHTS FROM GRAPHICAL GAUSSIAN MODEL |
| title_sort | on the relationship between financial and sustainable variables insights from graphical gaussian model |
| topic | ESG disclosure graphical Gaussian model socially responsible investments sustainability sustainable investments partial correlation |
| url | https://www.worldscientific.com/doi/10.1142/S2282717X24300010 |
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