Environmental, Social, and Governance Performance as a Driver of Financial Access: The Influence of Firm Size and Leverage

Abstract

Purpose: The purpose of this study is to investigate the influence of Sustainable Performance (Environmental, Social and Governance) with firm size and leverage on access to finance.

Design/Methodology/Approach: The study uses quantitative secondary data of top 100 companies of FTSE, 5 year data is collected from annual reports and Sustainability reports. OLS regression utilized to analyze the relationship between Sustainability Performance and Access to Finance.

Findings: The result shows that Sustainability Performance with Firm Size and Leverage significant impact on Access to Finance Companies that focus on sustainability endeavors such as environmental, social and governance undertakings have higher chances of raising funds. This implies that sustainability practices enhance more than merely a strategic benefit but also a major factor that attracts investors and lenders.

Implications/Originality/Value: This Study contribute the effect of Sustainability Performance on Access to Finance while incorporating Firm Size and Leverage into the same framework. The findings imply that investors and lenders treat ESG Score as informative signals of low risk and better creditworthiness.