The financial, business and accounting literature has critically studied the above relationship between the non-financial performance, expressed by the ESG rating and its pillars, and the economic and market performance, measured by specific ratios such as Roe, Roa, P/E and Tobin Q ratio. The Italian crisis law has introduced, in the last years, the code offirms’ financial crisis that consist ofthe inadequacy offorward cash flow respect to current debts. In this paper, we conducted a quantitative analysis regarding two financial years (2021 and 2022) on a sample of 145 non-financial firms listed on Milan stock exchange. Specifically, an OLS linear regression method is applied to test our hypotheses developed. Our findings currently demonstrate that there is no significant relationship between Environmental pillar with the two financial ratios (current ratio and solvency ratio). Thus, it seems that Environmental pillar would not represent a significant driver to use in order to manage the financial crisis of a firm and, consequently, increase its ability to generate positive cash flow. The originality of this study relies on examining the content oftwo important directives: the Non-financial directive which addressed environmental aspects to be reported and accounted for EU companies, and the Italian Financial crisis law which has been enacted to prevent and reduce the likelihood of bankruptcy of companies in the Italian context. Future research studies could better investigate, through more sophisticated statistical methods (i.e. Panel data analysis), the impact of macro-economic factors and/or other micro-economic factors.
KEYWORDS: Environmental rating, financial performance, ESG, Economic performance.
