24th MEB Conference - Budapest, 24.04.2026

Different companies listed on stock exchanges are declaring their non-financial reports alongside their financial statements, aiming to provide more detailed and substantial information on environmental, social, and governance (ESG) issues. Based on this, the risk associated with these three dimensions is also assessed. This paper examines the possible effect of certain institutional factors—such as political, economic, social, educational, and technological aspects—on the ESG risk of companies operating in the energy services industry. The results indicate that some macroeconomic factors of a country, such as legal regulations for employee protection, competitiveness, market concentration of firms, the human development index, and the percentage of GDP spent on research and development, influence the quality of non-financial reporting and ESG risk. This implies that companies operating or headquartered in countries or regions with more favorable institutional factors tend to exhibit a better approach to environmental, social, and governance issues, resulting in lower ESG risk.