Priem, Randy, & Gabellone Andrea. (2024). The impact of a firm’s ESG score on its cost of capital: Can a high ESG score serve as a substitute for a weaker legal environment? Sustainability Accounting, Management and Policy Journal. (JCQ Q1 – Journal impact Factor: 4.7 – Ranked 40 out of 174 in accounting).
This article, a collaboration between Dr. Priem and a promising graduate from UBI, investigates the link between the ESG score and cost of capital among 600 companies across 17 countries in the EURO STOXX 600 Index. It assesses how ESG factors influence companies’ cost of capital, exploring which aspects—environmental, social, governance—have the most impact, and which components of the Weighted Average Cost of Capital (WACC) are affected. Additionally, it considers if a high ESG score can offset a weaker legal framework, contributing insights into sustainable development practices.