Abstract: Purpose: This study investigates the impact of Environmental, Social, and Governance (ESG) controversies on financial performance and the moderating role of corporate social responsibility (CSR) committees in this relationship. Methodology: To achieve the research objective, panel data from non-financial firms listed in the STOXX Europe 600 index for 2018-2023 were used. The fixed effect regression was used to test the research hypotheses. Finding: The finding reveals that ESG controversies score is positively associated with ROA, indicating that firms with less controversy are better off financially. In addition, we find that the presence of CSR committee on the board positively moderates this association, enhancing the financial gain of good controversy management. To make the results robust and to deal with the possible endogeneity issues, we have also performed additional analysis with the Generalized Method of Moments (GMM) estimator. This confirmed that the main findings are valid. Recommendations: The findings add to the existing literature by highlighting the importance of some sustainability governance mechanisms in translating ESG practices into financial performance. The study offers real-world implications to policymakers, corporate boards, and investors who can utilize CSR committees to deliver better sustainability and financial performance. Keywords: ESG controversies, financial performance, CSR committee, corporate governance, sustainability

Title

An-Najah University Journal for Research – B Humanities

Publisher

An-Najah National University

Publisher Country

Palestine

Indexing

Scopus

Impact Factor

None

Publication Type

Online only

Volume

--

Year

2025

Pages

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