"The Effect of Adhering to ESG Criteria on the Shareholder Opportunity and Debt Costs for Firms Listed on the Lima Stock Exchange"

Abstract

"The integration of Environmental, Social, and Governance (ESG) criteria into corporate strategies has become increasingly relevant, not only as a response to global sustainability challenges but also as a determinant of firms’ access to financing. While previous studies in developed markets suggest that ESG performance may reduce financing costs by lowering perceived risk, the evidence remains mixed and context dependent. This research examines the impact of ESG compliance on the cost of financing for firms included on the Lima Stock Exchange (BVL) during the period 2018–2023. A balanced panel of 22 firms, including both ESG and non-ESG companies across diverse sectors, was analyzed using econometric panel data models. The study considers two dependent variables: cost of equity, estimated through the CAPM model, and cost of debt, measured as the weighted average interest rate of credit obligations. Results reveal a differentiated effect of ESG on financing costs, highlighting both the opportunities and limitations of sustainable practices in emerging markets. Findings provide relevant insights for firms, investors, and policymakers in Latin America. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2026."