ESG Risk Management and Firm Value of Listed Companies at the Securities Exchanges of East African Community Countries

Abstract

ESG risk management has become a strategic governance activity and not just a compliance activity because the pressure of the regulations has increased (Jansen, 2023). This study was conducted using a positivist philosophy with a census sampling technique across a population of 93 firms listed at the Nairobi Stock Exchange (NSE) in the East African Community (EAC) region, which were selected based on the inclusion criteria and adhered to the Resource Based View Theory, with a longitudinal design. Secondary data from annual reports, sustainability reports and securities exchange records for the period 2018-2024 were analysed using descriptive, correlation and regression analysis in SPSS Version 25. The largest ESG dimension examined was ESG risk management, which had a statistically significant and positive impact on the firm value (β = 3.660, t = 8.644, p < 0.001) and explained 42.3% of the variance. The study finds that markets reward systemic ESG risk management and suggests that regulators require risk disclosure frameworks covering ESG risks and corporates should integrate ESG risk management into enterprise risk and board oversight processes.

Keywords: Tobin's Q, investment, resource-based view

DOI: 10.7176/EJBM/18-9-02

Publication date: September 30^th 2026