Global sustainability initiatives like the environmental, social and governance (ESG) investing principle may lead to greater financial gains for hospitality firms in high-income countries but not in low-income nations, according to new findings from researchers in the Penn State School of Hospitality Management.

Penn State doctoral student Samantha Hwang and Professor of Hospitality Management Seoki Lee led a research team that assessed how implementing practices related to ESG impacts the financial well-being of hospitality firms, which consist of hotels, restaurants and casinos.

The researchers identified a significant moderating effect of national economic development between the ESG scores—measuring a company's performance in ESG practices—and return on assets of hospitality firms. This finding indicates that the success of ESG initiatives can depend on a country's gross domestic product.

The research team published its findings in the International Journal of Hospitality Management.

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