Consob published Sustainable Finance Notebook n. June 4, 2024onThe impact of the ESG factor on industrial activitywith analysis initiated through machine learning techniques.
In particular, the document delves into how i environmental, social and governance (ESG) factors affect the financial performance of companiesFocusing the analysis on more than 850 European and American companies between 2007 and 2021.
The document preliminarily emphasizes the growing importance of a sustainable economic model has prompted both financial markets and regulators to take ESG factors seriously.
Published study uses machine learning techniques to examine the relationship between ESG scoreswhich reflect the companies’ sustainability profile and EBIT, an indicator of earnings performance; The methodological approach, in particular, uses machine learning models to analyze. how the three pillars of ESG (environmental, social, governance) affect corporate profitability.
Therefore, the main findings of the study on ESG factors and industrial performance can be summarized as follows.
- ill The environmental pillar appears to have a more pronounced positive correlation with financial performance than the social and governance pillars.Companies with high environmental scores tend to show better profits.
- that European and American companies show differences in results, mainly attributable to the different regulatory frameworks in the two jurisdictions
- meusing machine learning techniques emphasizes that although they can improve the analysis of ECG data, Currently available metrics still have limitations.
The study contributes significantly to the existing literatureusing advanced techniques for analyzing sustainable financial problemsshowing that the methods machine learning can offer additional value. however, the quality of ESG metrics remains a challenge, and defining sustainability standards and metrics is critical to improving data collection and analysis.
The study highlightsThe importance of integrating ESG factors into their valuations and investment strategiesUsing machine learning techniques can help identify new opportunities and risks, but the continuous development and improvement of ESG metrics is essential to ensure informed and sustainable decisions.
In conclusion, an in-depth analysis of CONSOB shows howThe integration of ESG factors and the use of advanced technologies can represent an important evolution in the management and analysis of sustainable investments. offering a more complex and dynamic approach to assessing business performance.
