In a world facing environmental destruction and social injustices, corporations are called upon to act more sustainably. There has been an upswing in demand for green investments in the last decades, a trend further facilitated by the covid-19 pandemic. The increased demand has prompted scholars to investigate the relation between ESG-ratings and corporate financial performance. Despite a multitude of research being conducted in the field, it is difficult for firms and investors alike to get a grasp of the relation between the two as results are not coherent. The inconsistency in previous research implies further research in the field is necessary to improve the understanding of the relationship between ESG-ratings and corporate financial performance. A myriad of scholars has investigated the relation between ESG-ratings and corporate financial performance, research has found positive, insignificant, and even negative relationships between the variables. To further explore this relation, this thesis aims to answer the research question “Is there a relationship between ESG-scores and financial strength in publicly traded Swedish companies?”. By answering this research question, this thesis aims to provide additional insights on the relationship between ESG-scores and corporate financial performance. This thesis uses an unconventional proxy, the Piotroski F-score, to measurefinancial performance. The results of this study are analysed through the lens of economic theories such as the Efficient Market Hypothesis, Agency Theory, and Stakeholder theory. This is a panel data analysis based on 622 observations of Swedish firms through the years 2020-2022. Under a positivist paradigm with a deductive approach, this thesis seeks to contribute to the academic discourse on ESG-ratings and their relation to financial performance. The results were obtained through a pooled regression analysis with robust standard errors. The results of the regression showed that within Swedish publicly traded firms, the social pillar of the ESG-score has a significant relation to financial strength.

Analysis of the selected company was made on firm which provides SPA treatment. Results of analysis of external enviroment are negative influence of political and economic factors. Most positive impact have technological factors. Best results of the financial analysis reached indicators of liquidity, debt and indicators of bankruptcy models. Low return of assets and turnover time of claim are deficiencies. Current position of company is very good in terms of financial stability.