Green Goes Green: To What Extent Does A Company's ESG Rating Correlate With Its Stock Performance During The Covid-19 Pandemic? A Panel Data Regression Study On The EU Stock Market

Abstract: This thesis examines the relationship between ESG scores and financial performance during the early stages of the Covid-19 pandemic, using a sample of over 1,000 stocks from the EU and Schengen countries. For the overall market, the results revealed no significant relationship between the pre-2020 ESG score and financial performance. However, social and environmental scores had a positive relationship while governance had a negative relationship. Looking at specific sectors, the results varied between and within sectors. Some sectors, such as the IT and consumer discretionary sectors, had positive relationships with their respective pre-2020 ESG- scores. In contrast, other sectors had a negative relationship, such as the financial sector. Furthermore, the results display a number of insignificant relationships suggesting that investing in ESG activities may not have had an impact on financial performance during spring 2020.