The impact of ESG performance on intangible assets and intellectual capital in the food and beverage industry

What is it about?

Imagine the food and beverage companies you know, not just for their products. Still, they need to know how they take care of the environment, support social issues, and manage their business fairly—these are known as Environmental, Social, and Governance (ESG) practices. This study looks into how taking ESG into account seriously affects the less obvious but highly valuable parts of a company, like brand reputation and secret recipes—intangible assets and intellectual capital. Surprisingly, we found that companies worldwide that do better at ESG don't necessarily increase these values and sometimes might even lower them, especially when compared to European companies. This could mean that while ESG efforts are great, they might not immediately boost a company's worth in terms of these intangible assets. Why does this matter? It shows that doing good for society and the planet is complex and doesn't always lead to direct financial gain. Our findings suggest that companies must balance their ESG activities with how they are valued financially and tailor their ESG performance to reflect their unique brand and knowledge value truly. By sharing these insights, we're helping companies, investors, and policymakers understand that the path to integrating ESG isn't straightforward and needs careful consideration of its true impact on a company's worth beyond the balance sheet.

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