Disaggregating ESG Practices and Performance Outcomes: Empirical Evidence From the European Healthcare Industry

Authors:
Open Access
Publisher website
Google Scholar
Abstract
This study examines the associations between Environmental, Social, and Governance (ESG) practices and organizational performance in 283 European hospitals. Drawing on agency theory, stakeholder theory, and the resource‐based view, it analyses ESG indicators as accounting‐relevant information within the institutional context of European healthcare. Using 2021 ESG scores and 2023 accounting and operational outcomes from ORBIS, the study applies PLS‐SEM to examine operating cash flow, profitability (ROA/ROE), and operational efficiency. In the baseline PLS‐SEM model, aggregate ESG is positively associated with all three outcomes, but disaggregation reveals substantial heterogeneity. Governance is positively associated with each outcome, social practices are negatively associated with profitability and operational efficiency, and environmental practices show no significant associations. The study contributes by showing that aggregate ESG scores can obscure pillar‐specific mechanisms and theoretically expected time horizons. In European healthcare, governance displays more direct accounting relevance, whereas the potential benefits of social and environmental practices may be indirect, non‐financial, or deferred.

This publication has 54 references indexed in Scilit: