Document Type
Journal Article
Publication Date
4-2022
Abstract
Firm performance in the specific areas of environmental stewardship, social responsibility, and corporate governance (ESG) has become an important criterion that investors use in determining a firm’s value. This empirical investigation, based on stakeholder theory examines the relationship between regulatory oversight and third-party ESG ratings. Our research methodology involved quantitative, observational, and retrospective analyses. The study population consisted of 471 firms from two heavily regulated industry sectors—the utility and financial sectors—and from two less regulated sectors—the information technology and consumer discretionary sectors. We compiled the ESG ratings for the firms from two independent rating services. The quantitative evaluation included multiple regression analysis and multiway frequency analysis. The findings show a statistically significant difference for firms in heavily regulated sectors compared to the ratings for firms in less regulated sectors for the environmental and governance component ratings. This study provides information to help stakeholders recognize the influence of regulation on ESG ratings and explains to investors and company leaders why ESG ratings vary among different industry sectors. This study was limited to four specific sectors but may provide insights applicable to other sectors based on regulatory intensity.
College/Unit
College of Business
Academic Department
Business
Publication or Event Title
Engaged Management ReView
Volume
5
Issue
2
First Page
20
Last Page
31
ISSN
2375-8643
DOI
10.28953/2375-8643
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Recommended Citation
Torpey, John F. (2022) "The Influence of Regulatory Oversight on Environmental, Social, and Governance Ratings," Engaged Management ReView: Vol. 5 : Iss. 2 , Article 1.
Available at: https://doi.org/10.28953/2375-8643.1075
Included in
Business Administration, Management, and Operations Commons, Business Law, Public Responsibility, and Ethics Commons, Environmental Policy Commons, Social Policy Commons
