Modeling ESG Relationships with the Employability-Operational Growth-Profitability Trilogy in the European Food System
The development of a sustainable food system involves the coordinated efforts of all actors in the value chain. In this context, environmental, social, and governance (ESG) practices of companies play a key role, being closely related to their economic and financial resilience. The study uses the...
Saved in:
| Main Authors: | , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Editura ASE
2025-05-01
|
| Series: | Amfiteatru Economic |
| Subjects: | |
| Online Access: | https://www.amfiteatrueconomic.ro/temp/Article_3407.pdf |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Summary: | The development of a sustainable food system involves the coordinated efforts of all actors in
the value chain. In this context, environmental, social, and governance (ESG) practices of
companies play a key role, being closely related to their economic and financial resilience. The
study uses the Gaussian Graphical Model (GGM) technique and the Confirmatory Factor
Analysis (CFA) to analyse the direct and indirect causal relationships between ESG ratings and
the financial dimensions of European food companies: employability, operational growth, and
profitability. The analysed data was extracted from the Refinitiv Eikon database over a 15-year
period (2008-2023), covering 71 agri-food companies from the European Union (EU) member
states, the European Free Trade Association (EFTA) states, and the United Kingdom. Through
the methodological tools used, the research goes beyond the context of traditional models of
deterministic dependencies and expands the analysis area, highlighting the connections between
the categories of financial indicators (employability, operational growth, and profitability) and
ESG ratings. Modelling the complex structure of links between the variables relevant to the
management of the transition to climate neutrality creates new perspectives on the correlations
between them, exercised directly and indirectly (the ability to mediate). Thus, the results revealed
that that the transition to sustainable practices significantly affects the operational activities of
companies (negative correlation between ESG ratings and operational growth variables).
However, increased efficiency and productivity (positive relationship between ESG ratings and
employability and profitability variables) can mitigate the negative impact and maintain the
financial performance of companies.
|
|---|---|
| ISSN: | 1582-9146 2247-9104 |