Analyzing how ESG factors drive financial returns

This study advances the understanding of the relationship between Environmental, Social, and Governance factors and firm performance by conducting an in-depth analysis of companies from the United States included in the Standard and Poor’s 500 index. The investigation focuses on 61 entities from the healthcare sector, covering the period 2000–2024, uses linear and nonlinear regression models with fixed and random effects, as well as interaction variable models. The timeframe includes the global health crisis gene, thereby enabling an examination of how crisis conditions interact with Environmental, Social, and Governance determinants. Empirical evidence indicates that total energy consumption exerts a positive influence on financial and market performance, while the number of employees is positively associated with return on assets and the price-to-earnings ratio. Auditor tenure also demonstrates a beneficial impact on corporate results. Non-linear modelling identifies a critical threshold for total energy consumption at 13.92, beyond which its impact transitions from negative to positive while retaining statistical significance. Interaction models incorporating pandemic-related variables suggest that the crisis period was associated with increases in both workforce size and auditor tenure. Overall, the results reveal the complex interdependence between sustainability-related factors, firm performance, and exogenous shocks, offering significant implications for policy formulation and strategic corporate governance.