Abstract
This paper examines the influence of ESG factors on the systemic risk of oil and gas companies using firm-level data from 2004 to 2024. We find that firms with high (low) ESG scores consistently contribute less (more) to systemic risk. This effect is stronger among large, high-emission firms. The relationship between ESG and systemic risk is non-linear, with diminishing benefits beyond a certain ESG threshold—where further ESG improvement may increase systemic risk. During the 2014–2016 oil price collapse, firms with stronger ESG profiles contribute less to systemic risk. These findings underscore the role of corporate sustainability in mitigating sector-wide financial vulnerabilities.
| Original language | English |
|---|---|
| Article number | 104945 |
| Journal | International Review of Economics and Finance |
| Volume | 106 |
| DOIs | |
| State | Published - Mar 2026 |
Bibliographical note
Publisher Copyright:© 2026 The Authors.
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
-
SDG 9 Industry, Innovation, and Infrastructure -
SDG 12 Responsible Consumption and Production
Keywords
- Carbon regulation
- ESG
- Energy companies
- High-emission companies
- Systemic risk
ASJC Scopus subject areas
- Finance
- Economics and Econometrics
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