Relevance Between ESG Scores and Annual Turnover: Evidence from 453 Industrial Hong Kong Stocks

The international ESG score system has grown quickly in recent years. ESG is a generally accepted value investing standard as well as a responsible investment concept that considers the advantages of the economy, environment, society, and corporate governance. The relationship between ESG scores and stock annual turnover is examined in this study. This research selected 453 industrial Hong Kong stocks with information for 2022 and their most recent ESG scores on March 16, 2023, which could illustrate the performance over the preceding three years. For statistical data description, correlation analysis, and logistic regression, the research employed the R programming language. According to the study’s findings, there is a positive association between industrial stocks’ annual turnover on the Hong Kong Exchange and their ESG scores. Turnover, which is determined by multiplying volume by the stock price, refers to the total number of shares that were traded. When there is a shortage of stock, market participants will trade more actively, more money will be bought and sold, and turnover will subsequently rise. In contrast, when stocks are abundant, participants will trade less actively, less money will be bought and sold, and turnover will fall. In other words, the more active the trading, the higher the ESG score of the stock, and the securities supervisory agency should step up its oversight of this stock’s trading.