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Revista Universidad y Empresa
Print version ISSN 0124-4639On-line version ISSN 2145-4558
Abstract
AGUDELO ALZATE, Sara Manuela; DIAZ CANO, María José; OCAMPO DEL RIO, Carolina and CORREA-GARCIA, Jaime Andrés. Relationship Between ESG Criteria and the Cost of Capital in Latin American Companies Belonging to the Dow Jones Sustainability Index. rev.univ.empresa [online]. 2025, vol.27, n.48, a14241. Epub Dec 06, 2024. ISSN 0124-4639. https://doi.org/10.12804/revistas.urosario.edu.co/empresa/a.14241.
Objective:
To identify the relationship between the implementation of ESG sustainability standards and the cost of capital (WACC) of Latin American companies.
Methodology:
The sample was taken from companies that were part of the Dow Jones Sustainability Indexes (DJSI) between 2018 and 2022. The obtained data wereused to apply the data panel methodology.
Key findings:
A positive relationship is evident between ESG performance and the WACC of Latin American companies, also indicating that individually the rating of the governance criterion is the one that has the greatest influence on the WACC.
Conclusions:
From this it was possible to establish that in Latin America capital providers still do not consider the sustainable performance of companies as a key variable in decision-making, so the investment made by companies in these initiatives is not reflected in the reduction of the cost of capital.
Keywords : non-financial information; sustainable standards; ESG; weighted average cost of capital; WACC; sustainability; DJSI.
