20.500.12556/DKUM-95904 The impact of ESG on business performance anǂempirical analysis of NASDAQ–NYSE-Listed companies This study investigates the relationship between ESG ratings and a firm’s financial performance, focusing on Return on Assets (ROA) and Return on Equity (ROE). Using a combination of stepwise linear regression and feedforward neural networks (FFNN), we assess both the linear and nonlinear effects of ESG on financial performance. The regression models identify ESG as a significant, positively correlated factor in explaining financial performance, alongside firm demographics, sector affiliation, and financial indicators. Neural networks reveal nonlinear dynamics, particularly for ROA, suggesting threshold effects in the ESG–performance relationship. Sensitivity analysis confirms that ESG’s influence strengthens at higher values. Our findings highlight that ESG is not only statistically relevant but also interacts with firm characteristics in complex ways. These results contribute to the ongoing discourse on sustainable finance by showing that ESG can be a meaningful driver of financial outcomes, especially when modeled through nonlinear approaches. ESG financial performance ROA ROE regression neural network true false true Angleški jezik Angleški jezik Znanstveno delo 2025-11-06 16:42:49 2025-11-06 16:42:49 2025-11-07 03:14:59 0000-00-00 00:00:00 2025 0 0 str. 1-17 issue 21, [art. no.] 9683 Vol. 17 2025 0000-00-00 Zaloznikova Objavljeno NiDoloceno 2025-08-28 2025-10-28 2025-10-30 005.9 256244995 2071-1050 https://www.mdpi.com/2071-1050/17/21/9683 1 3ff0be6d-bb27-11f0-8c37-00155d000105 https://dk.um.si/Dokument.php?lang=slv&id=200464 RAZ_Herman_Aljaz_2025.pdf RAZ_Herman_Aljaz_2025.pdf 1 6952B3A01DCBA52E203742FDC4332A8D b509554b5cbc38aaeaa40f90226e27f164d34971dc461fb064ed6ae128e4fd36 9cdfd72b-bb27-11f0-8c37-00155d000105 https://dk.um.si/Dokument.php?lang=slv&id=200465 Ekonomsko-poslovna fakulteta 0 0 0