Dr. Tawfiq Tahtamoni, an assistant professor of Finance at Arcadia, is the lead author on a new study published in the Journal of Environmental Management. Along with colleagues M. Kabir Hassan of the University of New Orleans and Kazi Sohag of Ural Federal University (Russia), Tahtamoni examined how Environmental, Social, and Governance (ESG) practices impacted the financial performance of United States-based IT firms from 2010 to 2022. 

Looking at data from 31 companies–including Apple, Microsoft, Amazon, and others that make up approximately 65-70% of the sector–the researchers found that consistent ESG standards had a significant positive impact in the long term, while short-term ESG practices did not yield immediate financial benefits. 

“ESG efforts usually don’t bring fast results,” Tahtamoni said. “Improving how a company treats employees, builds trust, or manages environmental issues takes time. These actions slowly improve the company’s image, reduce risk, and increase long-term value. ESG should be part of a long-term plan, not just a quick project.”

The research team also investigated how economic volatility and political regime shift affected ESG practices at IT firms, especially during the COVID-19 pandemic. Their findings suggest that economic volatility during the pandemic helped IT firms, while federal political changes did not have a direct influence on ESG practices.

“There was higher demand for things like cloud computing, video calls, and remote work tools,” Tahtamoni explained. “Political changes didn’t affect business operations much, but they did seem to influence investor confidence. This may be because policy changes under different governments affect expectations around ESG and/or taxes.”

According to the researchers, previous studies looked at ESG practices more broadly, but few focused only on the IT sector. 

“The U.S. IT sector is very important to the economy,” Tahtamoni said. “These firms are often global, fast-moving, and rely more on talent and digital tools than physical assets. ESG practices work differently in this sector compared to traditional industries like manufacturing.”

The researchers suggest policymakers in the United States should focus on creating a stable and supportive environment for ESG.

“For example, they can provide clear ESG rules, offer tax credits for green projects, or support employee training,” Tahtamoni said. “These policies matter.”