Reuben Davids, Noxolo Sokweba, Tatenda Nharo
Abstract
The study examines the influence of social scores on the financial performance of JSE listed mining companies for a period spanning from 2022 to 2024. Firms are under pressure to increase transparency in reporting their ESG actions, necessitating the need for companies to understand how social actions and disclosures affect overall firm performance. The study follows a purposive convenience sampling strategy and utilizes panel data analysis to investigate the influence of social performance on financial performance. Social performance is measured by scoring companies against the newly introduced JSE Sustainability Disclosure Guidelines (JSE SDG). Financial performance is measured by ROA. Firm size, firm age, and leverage are employed as control variables. The results show that social performance does not influence financial performance for firms in the sample. Leverage has a strong negative correlation with financial performance, while firm size has a moderately significant relationship with the dependent variable. Firm is statistically insignificant in explaining firm performance. The study responds to growing calls for context specific research in ESG for emerging market economies such as South Africa. Practical insights are offered to managers with regards to potential delayed CSR benefits, capital structure optimisation and the importance of managing large-scale operations.