Home⇛SMN Digest⇛vol. 11 no. 2 (2025)

The Impact of ESG Practices on the Financial Performance of Publicly Listed Companies in the Philippines

Kyla Henrietta Guillermo

Discipline: Finance

 

Abstract:

In more established economies, the integration of Environmental, Social, and Governance (ESG) practices into corporate strategies has proven beneficial for long-term financial growth and overall corporate development. However, in developing countries like the Philippines, the relationship between these ESG practices and financial performance remains vague. This study examines whether companies in the Philippines prioritize investing in ESG practices, given the evolving economic landscape. This study employs panel regression analysis, using fixed effect models and includes interaction terms to test moderating variables, and supplemented by descriptive statistics on 200 company-year observations of publicly listed companies from 2013 to 2022, sourced from the Philippine Stock Exchange website and the Thomson Reuters database. The study finds that ESG practices have a positive impact on financial performance. This relationship is positively influenced by a company’s visibility and negatively moderated by its organizational profile. These findings suggest that integrating ESG practices can offer long-term financial benefits, particularly when supported by strong visibility strategies and an understanding of organizational profile.



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