Relationship Between ESG Criteria and the Cost of Capital in Latin American Companies Belonging to the Dow Jones Sustainability Index

DOI:  https://doi.org/10.12804/revistas.urosario.edu.co/empresa/a.14241

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Published: Dec 6, 2024
Issue: Vol. 27 No. 48 (2025)
Section Scientific and technological research article


Keywords: non-financial information sustainable standards ESG weighted average cost of capital WACC sustainability DJSI

Main Article Content

Authors

  Sara Manuela Agudelo Alzate
Universidad de Antioquia
  Maria José Díaz Cano
Universidad de Antioquia
  Carolina Ocampo del Rio
Universidad de Antioquia
  Jaime Andrés Correa-García
Universidad de Antioquia

Abstract

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.

Author Biographies

Sara Manuela Agudelo Alzate, Universidad de Antioquia

Contadora pública, egresada Universidad de Antioquia.

Maria José Díaz Cano, Universidad de Antioquia

Contadora pública, egresada Universidad de Antioquia.

Carolina Ocampo del Rio, Universidad de Antioquia

Contadora pública, egresada Universidad de Antioquia.

How to Cite
Agudelo Alzate, S. M., Díaz Cano, M. J., Ocampo del Rio, C., & Correa-García, J. A. (2024). Relationship Between ESG Criteria and the Cost of Capital in Latin American Companies Belonging to the Dow Jones Sustainability Index. Revista Universidad Y Empresa, 27(48), 1–33. https://doi.org/10.12804/revistas.urosario.edu.co/empresa/a.14241
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