Environmental, Social and Governance Credentials of Agricultural Companies—The Interplay with Company Size

Abstract

Based on the significance of the corporate social responsibility (CSR) activities, respectively, the Environmental, Social and Governance (ESG) measures, for companies’ advancement in the fields of agriculture, the purpose of our study is to appraise how the ESG measures influence the size of public companies from the agricultural sectors, with particular attention on the environmental pillar. The research methodology consists in applying two econometric procedures to assess the direct effects of the ESG activities on the size of public agricultural firms by models of robust regression (RREG) and to appraise global implications of ESG measures on companies’ dimension by models of structural equations (SEM). Data encloses the ESG indicators, focusing on environmental indicators and agricultural companies’ size (proxied by total assets), extracted from the Thomson Reuters Refinitiv Eikon database for the fiscal year 2020. Main results reveal that several components of the ESG measures, especially the environmental ones, may influence the size of the agricultural companies, given the significant companies’ strengths in implementing CSR actions to ensure sustainable resource management. We propose adequate strategies for companies to provide robust resource management and proper integration of the environmental credentials.