The Role of ESG Factors in Creating Corporate Value: Evidence from Polish Public Companies

Abstract

Purpose | The study aims to examine the role of environmental, social, and govern ance (ESG) factors in creating corporate value for companies listed on the Warsaw Stock Exchange (WSE). The study investigates the impact of ESG performance on firm valuation, focusing on the individual effects of the three pillars, and assessing their influence on the enterprise value to EBITDA ratio. Research method | The research employs a pooled ordinary least squares (OLS) regression analysis to test the relationship between ESG scores and firm value. A sample of 42 public companies is analysed with the use of data from the LSEG database. Results | The results show that ESG scores, particularly in the governance pillar, have a negative or insignificant impact on the valuation of Polish companies. The overall ESG score negatively correlates with the EV/EBITDA ratio, suggesting that ESG factors are not yet fully integrated into the strategic objectives of Polish companies. Furthermore, governance practices were found to have a significant negative effect on firm value, while environmental and social factors were largely insignificant. Originality / value / implications / recommendations | The findings suggest that while ESG reporting is gaining interest, its financial benefits are not yet evident in Poland. Future research should focus on sector-specific ESG analysis and explore the role of stakeholder engagement in enhancing the financial impact of sustainability initiatives.