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How to turn Sustainability into Profit

Gambucci, Aiona LU ; Hansson, Erik LU and Zemtsovski, Alexandra LU (2025) IBUH19 20251
Department of Business Administration
Abstract
The aim of this study is to identify what the relationship between ESG scores and capital structure is, and whether it differs depending on the selected capital structure measure. Building on previous literature on sustainability strategies and capital structure, this paper revises the current state of the interconnectivity between ESG and financing decisions. By employing a quantitative study with a deductive approach, four hypotheses were tested. The variables were constructed with secondary data from Bloomberg and Refinitiv Eikon. The findings reveal that ESG scores affect both cost of debt and market leverage measures, whereas results for cost of equity and book leverage remain inconclusive. The generalisability of the findings can be... (More)
The aim of this study is to identify what the relationship between ESG scores and capital structure is, and whether it differs depending on the selected capital structure measure. Building on previous literature on sustainability strategies and capital structure, this paper revises the current state of the interconnectivity between ESG and financing decisions. By employing a quantitative study with a deductive approach, four hypotheses were tested. The variables were constructed with secondary data from Bloomberg and Refinitiv Eikon. The findings reveal that ESG scores affect both cost of debt and market leverage measures, whereas results for cost of equity and book leverage remain inconclusive. The generalisability of the findings can be increased by replicating the method and sample construction to new sets of data in new geographic markets, thereby contributing to a greater understanding of how firms in an international setting can turn sustainability into profit. (Less)
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author
Gambucci, Aiona LU ; Hansson, Erik LU and Zemtsovski, Alexandra LU
supervisor
organization
course
IBUH19 20251
year
type
M2 - Bachelor Degree
subject
keywords
ESG, CSR, Capital structure, Cost of equity, Cost of debt, Market leverage, Book leverage
language
English
id
9203787
date added to LUP
2025-06-23 10:48:17
date last changed
2025-06-23 10:48:17
@misc{9203787,
  abstract     = {{The aim of this study is to identify what the relationship between ESG scores and capital structure is, and whether it differs depending on the selected capital structure measure. Building on previous literature on sustainability strategies and capital structure, this paper revises the current state of the interconnectivity between ESG and financing decisions. By employing a quantitative study with a deductive approach, four hypotheses were tested. The variables were constructed with secondary data from Bloomberg and Refinitiv Eikon. The findings reveal that ESG scores affect both cost of debt and market leverage measures, whereas results for cost of equity and book leverage remain inconclusive. The generalisability of the findings can be increased by replicating the method and sample construction to new sets of data in new geographic markets, thereby contributing to a greater understanding of how firms in an international setting can turn sustainability into profit.}},
  author       = {{Gambucci, Aiona and Hansson, Erik and Zemtsovski, Alexandra}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{How to turn Sustainability into Profit}},
  year         = {{2025}},
}