Impact of ESG scores on stock prices of leading F&B companies during Covid-19

Abstract

Our study uses Fixed Effects Model (FEM), Random Effects Model (REM), Pooled Ordinary Least Squares (OLS), and Feasible Generalised Least Squares (FGLS) model to examine the impact of ESG scores on stock prices of leading F&B companies during the COVID-19 epidemic. Results indicate a significant positive relationship between ESG scores and stock prices, with a 1% increase in ESG score corresponding to an 11.13% increase in stock price. Moreover, companies prioritizing ESG initiatives demonstrate enhanced reputation, customer trust, and financial performance. Contrarily, the impact of COVID-19 on stock prices appears statistically insignificant, likely due to the diverse geographical origins of the sampled companies. Additionally, company size exhibits negligible influence on stock prices, while the interaction between COVID-19 and ESG scores shows no significant effect on stock prices. Our findings underline the importance of ESG considerations for investors and companies seeking sustainable growth and resilience.