The Impact of Environmental, Social, and Governance on Sales Changes

Abstract

This research investigates the relationship between Environmental, Social, and Governance (ESG) practices and corporate sales stability within non-financial firms publicly listed in Taiwan over the period 2008 to 2024. Employing panel data regression analysis, the findings demonstrate that robust ESG performance significantly correlates with lower sales volatility. This indicates that proactive engagement in ESG initiatives effectively aids firms in preserving market share and bolstering customer confidence. Additionally, the presence of effective corporate governance mechanisms, such as independent board structures and appropriately aligned managerial incentives, further amplifies this positive relationship. In contrast, firms experiencing frequent ESG-related controversies tend to exhibit increased fluctuations in sales, underscoring the critical importance of comprehensive risk management strategies. The results suggest that integrating ESG principles into corporate strategic planning not only contributes to enhanced financial stability but also establishes a competitive advantage. These insights are particularly valuable for corporate executives focused on achieving sustainable growth and resilience amidst fluctuating market conditions.