Corporate Sustainability and the Financial Implications for the European Basic Materials Industry

Abstract

In this thesis we investigate the relationship between sustainable performance and firm performance within the basic materials industry. Specifically, and in line with prior studies, we demonstrate a significant, negative relationship between sustainable performance, (using Thomson Reuters Asset4 ESG-index) and financial firm performance (return on assets and Tobin’s q) for a panel data sample between 2003 and 2013 of 94 European basic materials firms. Like many previous researchers, we find inconclusive results when testing whether this relationship is linear or non-linear. We discuss the implications of these findings.