The Relationship Between ESG Performance and the Market Value and Market Share of Listed Companies Before and After COVID-19

Abstract

Objective: This study investigates the relationship between Environmental, Social, and Governance (ESG) performance and two key financial indicators market value and market share of industrial listed companies on the Iraq Stock Exchange, before and after the COVID-19 pandemic.

Methodology: A descriptive-analytical approach was applied. The study covered all 24 Iraqi industrial companies listed on the Iraq Stock Exchange from 2016 to 2022. Secondary data were collected from published financial reports. Hypotheses were tested using Structural Equation Modeling (SEM) and Path Analysis with Smart PLS version 4.

Findings: ANOVA results revealed significant variations among companies in terms of environmental, social, and overall ESG performance. Path analysis showed no statistically significant effect of ESG performance on market value in either period. However, ESG performance was found to have a statistically significant positive impact on market share, both before and after the pandemic.

Conclusion: The study concludes that while ESG performance does not affect market value, it positively influences market share. It recommends enhancing corporate transparency and accountability by issuing separate ESG reports alongside annual financial statements to better meet investor and stakeholder information needs.