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The present research investigates the correlation between environmental, social, and governance (ESG) factors and financial performance, dissecting the impact of each element on a company's profitability. The study focuses on small and medium-sized enterprises (SMEs) situated in the SouthEast of Romania within the construction sector, spanning a five-year period (2016-2021). The empirical findings reveal a positive association between ESG practices and financial performance, pointing out that enhancing ESG initiatives could effectively improve profitability of SMEs. |
