This paper analyzes how environmental, social, and governance performance affects firm market value using data on ESG controversies from Moody’s ESG Solutions and RepRisk. The findings show that ESG controversies have a clear and measurable financial impact, leading to statistically significant negative abnormal equity returns in both the short term and over a one‑year period. Moderate to severe ESG incidents are associated with stock market losses ranging from approximately 1.3% to 7.5% over twelve months. The results demonstrate that poor ESG performance can materially harm shareholder value and highlight the importance of strong ESG risk management for long‑term financial stability and investor confidence.

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