ESG and Corporate Financial Performance in Europe's Polycrisis

Master's Thesis from the year 2026 in the subject Business economics - Business Management, Corporate Governance, grade: 1,0, , language: English, abstract: 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.