Abhatoo - Centre Nationale de Documentation

The purpose of this research paper is to examine the impact of Environmental, Social, and Governance (ESG) performance on the financial performance of 43 Moroccan companies listed on the Casablanca Stock Exchange (CSE). Regarding methodology, the study employs correlation and simple linear regression analyses on financial data extracted from the CSE and ESG scores obtained from LSEG Data & Analytics for the year 2022. The aim is to explore the effects of Environmental, Social, and Governance (ESG) factors on key financial performance variables, including Return on Equity (ROE), Return on Assets (ROA), Net Profit Margin, Debt-to-Equity Ratio, and Turnover Growth Ratio. The study results reveal a significant positive impact of ESG performance on financial performance. Specifically, Environmental performance, particularly the subfactor Resource Use, and Social performance, particularly the subfactor Workforce, along with CSR Strategy within Governance performance, positively influence Net Profit Margin. However, no correlations were observed between ESG performance and variables measuring financial performance, such as ROE, ROA, and Turnover Growth Ratio. Furthermore, ESG performance demonstrates a significant positive effect on the Debt- to-Equity ratio. Subfactors such as Emissions and Resource Use within the Environmental factor, as
well as Product Responsibility within Social performance, exert a noteworthy positive impact on the Debt-to-Equity Ratio. The novelty of this research lies in employing ESG scores in Morocco to explore the relationship between sustainability practices and financial performance within the Moroccan business context, offering substantial information for both academic researchers and practitioners.