Investigating the Relationship Between ESG Performance and Financial Performance During the COVID-19 Pandemic: Evidence from the Hotel Industry

Kaminskyi, Andrii; Osetskyi, Valerii; Almeida, Nuno; Nehrey, Maryna

http://hdl.handle.net/10400.8/13502

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Abstract(s)

The global economy was profoundly impacted by the emergence of the COVID-19 pandemic, with the hotel industry being among the sectors most severely affected. This study explores the relationship between environmental, social, and governance (ESG) performance and financial performance during the pandemic, focusing on 35 of the world’s largest hotel companies. A structured methodology was employed to assess short-term financial resilience using the shock depth (SD) and recovery rate (RR) indicators and long-term performance through the value-added weekly index (VAWI) and K-ratio. The findings of this study indicated that faster recovery was associated with greater capitalization. Furthermore, analysis of ESG scores indicated a median increase from 2019 to 2022, particularly in the figures of the environmental component. Despite these increases, pre-pandemic ESG scores demonstrated limited influence on short-term financial performance, though a correlation was observed between governance scores (as ESG score subscores) and long-term K-ratios. This finding suggests potential trade-offs between improving financial performance and maintaining governance standards in the sense of ESG scores. This study points to the intricate interplay between ESG and financial metrics during systemic crises, providing valuable insights for risk management and strategic planning in the hospitality business. The implications of these findings extend to the enhancement of resilience and the alignment of ESG strategies with financial sustainability.

Keywords

ESG performance Financial resilience Hotel industry COVID-19 pandemic Shock depth Recovery rate Value-added weekly index K-ratio Risk–return correspondence Sustainability

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http://hdl.handle.net/10400.8/13502

Citation

Kaminskyi, A., Osetskyi, V., Almeida, N., & Nehrey, M. (2025). Investigating the Relationship Between ESG Performance and Financial Performance During the COVID-19 Pandemic: Evidence from the Hotel Industry. Journal of Risk and Financial Management, 18(3), 126. https://doi.org/10.3390/jrfm18030126