Financial Materiality and Market Dynamics of ESG Performance in the Global Electronics Industry: An Empirical Analysis Amidst Diverse Regulatory and Technological Landscapes

Abstract

Henry Efe Onomakpo Onomakpo*

The global electronics industry faces escalating sustainability regulations and rapid technological change. This study quantitatively examines the financial implications of Environmental, Social, and Governance (ESG) performance for 13 multinational electronics firms from 2015 to 2025. Panel regressions, controlling for Fama-French-Momentum factors, find that sustained, long-term aggregate ESG and social (S) pillar scores are positively associated with stock excess returns. Vector Auto-regression (VAR) analysis of a constructed ESG factor (HML_ESG) reveals limited dynamic linkage with traditional market risks, indicating that ESG factors exhibit distinct risk/ return characteristics within this sector. These results are contextualized within a landscape of diverse global regulations (e.g., WEEE, RoHS, ESPR) and the growing influence of advanced technologies, including artificial intelligence and digital twins. The findings inform a "Global Regulatory-ESG Financial Salience Model," providing empirical evidence of ESG’s financial materiality. This research offers insights for firms navigating sustainability pressures and for investors evaluating performance in the evolving electronics industry, highlighting the market’s potential recognition of strategic, long-term ESG commitments.

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