The role of environmental, social, and governance (ESG) management information has evolved over the years. Some have argued that companies should not allocate resources to socially responsible activities. The previous focus on financial targets led to the view that ESG investing was a cost to shareholder value. However, companies have recently argued that they should consider environmental and social responsibilities for market survival. The European Union (EU) has initiated a series of reforms in sustainable finance, transforming how financial and nonfinancial companies operate. ESG practices are a long-term strategy to achieve positive results in company performance by securing social legitimacy. However, there is still a debate in the literature about whether a company’s efforts to advance ESG factors improve its performance or reputation. We conducted a rigorous panel data analysis to investigate the relationship between ESG scores and the financial performance of US tech companies from 2017 to 2022. We conducted comprehensive tests for various statistical issues such as multicollinearity, endogeneity, cross-sectional dependence, slope heterogeneity, cross-sectional time effects, autocorrelation, and heteroskedasticity in the error term to ensure the reliability of our findings. We estimated the elasticity coefficients using the panel-corrected standard errors (PCSE) estimator developed by Beck and Katz (Am Polit Sci Rev 89:634–647, 1995). The analysis revealed that environmental sustainability management positively impacts financial performance, while social and governance sustainability management has a negative impact. This finding suggests that a company’s investments in labor, human rights, community, and product responsibility do not have the expected positive impact on financial performance. The study concludes with a broad discussion of the findings, emphasizing the practical implications for managers, shareholders, and investors.