[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-120067-en":3,"doc-seo-120067-105":30,"detail-sidebar-cat-0-en-105":83},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":4,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":27,"seo_description":14,"update_tm":28,"read_time":29},120067,2336464648322,"Aria","https://ap-avatar.wpscdn.com/avatar/2200025388227c56fec?_k=1778556882303663488",8,"Research & Report","Firms’ profitability and ESG score - A machine learning approach","Corporate social responsibility (CSR) influences firms’ performance by strengthening reputation, innovation capabilities, and customer loyalty, yet evidence linking CSR indicators such as ESG scores to profitability remains limited. This study analyzes a sample of about 400 EuroStoxx-600 companies from 2011 to 2020 using multiple machine learning models. The work tests whether ESG scores significantly affect firms’ profitability by relating ESG to EBIT and applying interpretability tools including partial dependence plots, individual conditional expectation, and Shapley values, achieving high EBIT prediction accuracy.","Received: 26 July 2022 Revised: 18 January 2023 Accepted: 27 February 2023  \nDOI: 10.1002/asmb.2758  \nSPECIAL ISSUE PAPER   \nFirms’ profitability and ESG score: A machine learning approach  \nValeria D’Amato1  Rita D’Ecclesia2  Susanna Levantesi2  \n1 Department of Pharmacy, University of Salerno, Via Giovanni Paolo II, 132 Fisciano, 84084, Italy  \n2 Department of Pharmacy, Sapienza University of Rome, Piazzale Aldo Moro, 5 Roma, 00185, Italy  \nCorrespondence  \nSusanna Levantesi, Department of Pharmacy, Sapienza University of Rome, Piazzale Aldo Moro, 5, 00185 Roma, Italy. Email: [susanna.levantesi@uniroma1.it](susanna.levantesi@uniroma1.it)  \nAbstract  \nCorporate social responsibility (CSR) is found to impact firms’ performance, for instance, enhancing reputation, increasing innovation capabilities, customer loyalty, and customer satisfaction help improve financial performance. However, the literature provides limited evidence of the relationship between CSR indicators, such as the ESG score, and the firm’s profitability, which is often measured by the earnings before interest and taxes (EBIT) . We investigate this issue by analyzing a sample of about 400 companies constituting the EuroStoxx-600 index, from 2011 to 2020, using different machine learning models. The novelty ofour contribution lies in assessing whether the ESG score has a significant influence on the firms’ profitability. Specifically, we investigate the relationship between ESG score and EBIT using machine learning interpretability toolboxes such as partial dependence plots and individual conditional expectation. Tools which help to measure the functional relationship between the predicted response and one or more features, while the Shapley value allows to examine the contribution of the feature to the prediction. Our findings show that the model can reach high levels of accuracy in detecting EBIT and that theESG score is a promising predictor, compared to other traditional accounting variables.  \nKEYW O RDS  \nESG investments, firm’s performance, interpretability tools, machine learning  \n1  INTRODUCTION  \nESG adoption is becoming a crucial issue, driven by client demand and a desire to make an impact. Investors and banks are moving away from basic screening methods towards more targeted and sophisticated strategies. One common strategy is integrating ESG into the investment process, the business as usual process. Investors are taking a holistic approach as they look to comprehensively embed ESG into the investment process rigorous approach.  \nThe increasing sophistication of ESG investors makes them recognize that companies with good sustainable credentials are more likely to outperform. Fewer investors point to sacrificing returns as an adoption hurdle. And more are now investing in ESG with the specific and sole aim of generating alpha. Furthermore, investors largely agree that investment returns and sustainable impact go hand in hand, so firms increasingly recognize the economic value of embedding ESG criteria in their activities.  \nThis is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.  \n© 2023 The Authors. Applied Stochastic Models in Business and Industry published by John Wiley & Sons Ltd.  \nAppl Stochastic Models Bus Ind. 2024;40:243–[261. wileyonlinelibrary.com/journal/asmb](261. wileyonlinelibrary.com/journal/asmb)  243  \n244  D’AMATO et al.  \nFurthermore, it has been proved that ESG investments can be a chance to reduce the systemic risk for investors. Cerqueti et al.1 evaluate the impact of portfolio liquidation on equity mutual funds with various ESG ratings. The authors notice that the relative market value loss of the high ESG ranked funds is lower than the loss experienced by the low ESG ranked ones in periods with lower","cbCaip5iMFiJn941","https://ap.wps.com/l/cbCaip5iMFiJn941","pdf",2248651,1,19,"English","en",105,"# Introduction\n## ESG adoption and investment strategies\n## Research gap: ESG indicators and profitability\n## Study approach and interpretability tools","[{\"question\":\"What relationship does the study examine between ESG and profitability?\",\"answer\":\"The study investigates whether the ESG score has a significant influence on firms’ profitability by analyzing the relationship between ESG score and EBIT.\"}]","Firms’ profitability and ESG score - A machine learning approach | PDF",1785727975,48,{"code":4,"msg":31,"data":32},"ok",{"site_id":24,"language":23,"slug":33,"title":13,"keywords":34,"description":14,"schema_data":35,"social_meta":78,"head_meta":80,"extra_data":82,"updated_unix":28},"firms-profitability-and-esg-score-a-machine-learning-approach","",{"@graph":36,"@context":77},[37,54,68],{"@type":38,"itemListElement":39},"BreadcrumbList",[40,44,48,51],{"item":41,"name":42,"@type":43,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":45,"name":46,"@type":43,"position":47},"https://docshare.wps.com/document/","Document",2,{"item":49,"name":12,"@type":43,"position":50},"https://docshare.wps.com/document/research-report/",3,{"item":52,"name":13,"@type":43,"position":53},"https://docshare.wps.com/document/firms-profitability-and-esg-score-a-machine-learning-approach/120067/",4,{"url":52,"name":13,"@type":55,"author":56,"headline":13,"publisher":58,"fileFormat":61,"inLanguage":23,"description":14,"dateModified":62,"datePublished":62,"encodingFormat":61,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":57},"Person",{"url":41,"name":59,"@type":60},"DocShare","Organization","application/pdf","2026-08-03",true,{"@type":65,"interactionType":66,"userInteractionCount":4},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71],{"name":72,"@type":73,"acceptedAnswer":74},"What relationship does the study examine between ESG and profitability?","Question",{"text":75,"@type":76},"The study investigates whether the ESG score has a significant influence on firms’ profitability by analyzing the relationship between ESG score and EBIT.","Answer","https://schema.org",{"og:url":52,"og:type":79,"og:title":13,"og:site_name":59,"og:description":14},"article",{"robots":81,"canonical":52},"index,follow",{"doc_id":7,"site_id":24},{"code":4,"msg":5,"data":84},[85,89,93,97,102,107,112,115,120,123,127],{"id":20,"doc_module":4,"doc_module_name":46,"category_name":86,"show_sort_weight":87,"slug":88},"Story & Novel",90,"story-novel",{"id":47,"doc_module":4,"doc_module_name":46,"category_name":90,"show_sort_weight":91,"slug":92},"Literature",80,"literature",{"id":53,"doc_module":4,"doc_module_name":46,"category_name":94,"show_sort_weight":95,"slug":96},"Exam",70,"exam",{"id":98,"doc_module":4,"doc_module_name":46,"category_name":99,"show_sort_weight":100,"slug":101},5,"Comic",60,"comic",{"id":103,"doc_module":4,"doc_module_name":46,"category_name":104,"show_sort_weight":105,"slug":106},6,"Technology",50,"technology",{"id":108,"doc_module":4,"doc_module_name":46,"category_name":109,"show_sort_weight":110,"slug":111},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":46,"category_name":12,"show_sort_weight":113,"slug":114},30,"research-report",{"id":116,"doc_module":4,"doc_module_name":46,"category_name":117,"show_sort_weight":118,"slug":119},9,"Religion & Spirituality",20,"religion-spirituality",{"id":118,"doc_module":4,"doc_module_name":46,"category_name":121,"show_sort_weight":118,"slug":122},"World Cup","world-cup",{"id":124,"doc_module":4,"doc_module_name":46,"category_name":125,"show_sort_weight":124,"slug":126},10,"Lifestyle","lifestyle",{"id":21,"doc_module":4,"doc_module_name":46,"category_name":128,"show_sort_weight":98,"slug":129},"General","general"]