"Conducted by Professors Rodrigo Tavares (Nova SBE) and Catalina Stefanescu-Cuntze (ESMT), alongside Catarina Sá (Teaching Assistant at Nova SBE), the most extensive academic study ever conducted on corporate sustainability in the Gulf region analysed 14 years of data from publicly listed companies across Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The overwhelming majority of studies focus on a single hypothesis: that companies investing in sustainability tend to be more profitable."
"In both directions, the results revealed weak, inconsistent, and statistically non-robust relationships. This is unlike evidence from Europe, North America, and Asia. Evidence of bidirectional causality was found in only two out of 54 firms (approximately 3.7% of the sample), while an additional ten firms (approximately 18.5%) exhibited unidirectional causality-either from ESG to financial performance or vice versa. This shows that, while in mature markets investors reward sustainable practices with higher stock valuations,"
"ESG performance does not lead to better stock market performance in the Gulf, nor does profit boost sustainability efforts in the region, finds new research by Nova School of Business and Economics (Nova SBE) and ESMT Berlin. The dataset covered more than 4,400 monthly ESG score observations and nearly 9,000 stock return observations between 2009 and 2023. Conducted by Professors Rodrigo Tavares (Nova SBE) and Catalina Stefanescu-Cuntze (ESMT),"
Data cover more than 4,400 monthly ESG score observations and nearly 9,000 stock return observations between 2009 and 2023 for publicly listed companies across Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Analysis of 14 years of firm-level data found weak, inconsistent, and statistically non-robust relationships between ESG performance and financial performance in both directions. Bidirectional causality appeared in only two of 54 firms, while ten firms exhibited unidirectional causality. Evidence contrasts with Europe, North America, and Asia where investors tend to reward sustainability. ESG adoption in the Gulf is driven mainly by government policy and national economic diversification strategies rather than market valuation or profit incentives.
Read at London Business News | Londonlovesbusiness.com
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