ESG and Corporate Financial Performance in Europe’s Polycrisis

This thesis examines whether ESG still “pays” financially for European firms between 2015 and 2025, in a context shaped by the EU’s Green Deal and CSRD on the one hand and by overlapping crises, inflation, and tighter financing conditions on the other. Methodologically, it conducts a systematic literature review with a qualitative (narrative) synthesis of quantitative, firm‑level studies on the ESG–CFP relationship for European companies. The final evidence base comprises 23 studies.

Financially, ESG effects are more consistent in market‑based and risk‑related outcomes (e.g., valuation multiples, volatility/risk measures, and in some studies the cost of capital) than in short‑term accounting profitability (ROA/ROE), where results are smaller and more heterogeneous. Across ESG dimensions, the social pillar emerges as the most robust driver of firm value; environmental effects appear more context-dependent (often stronger in high‑impact sectors through transition‑risk channels), while governance mainly functions as an enabling condition for credible ESG strategies. Over the 2015–2025 window, the review does not identify a strong, consistent time trend in the ESG–CFP relationship. A key reason is that relatively few studies isolate crisis subperiods cleanly enough to compare pre‑crisis, crisis, and recovery phases in a consistent way.