Environmental, Social, and Governance Ratings in the European Technological Industry

This study explores the adoption of environmental, social, and governance (ESG) practices in the European technology sector compared to non-technology industries. Using a dataset of 2,614 firms from the CSRHub database (2019–2022), including 334 from the technology sector, we applied a logistic regression model to determine whether the technology sector displays a statistically distinguishable ESG configuration compared to other industries. The findings reveal a unique ESG profile for technology firms. Community engagement stood out as a positive and significant differentiator, emphasizing the sector’s strong focus on social responsibility and stakeholder alignment. Conversely, environmental responsibility and governance scores were notably weaker, indicating underperformance in ecological footprint management and transparency practices. Employee-related indicators did not significantly differentiate technology companies, likely due to regulatory consistency across industries and limitations in measurement. These results suggest that technology firms tend to emphasize community initiatives but often fall short in addressing environmental and governance issues. The study adds to the ESG literature by providing sector-specific evidence and offering practical insights for managers and policymakers. Technology companies should strengthen their environmental strategies and enhance governance frameworks, including increasing board independence and ensuring algorithmic accountability, while leveraging community engagement as a means of strengthening legitimacy and gaining a competitive advantage.