As investors increasingly look for financial returns as well as positive societal and ecological impacts, sustainable finance driven by considerations of environmental, social, and governance (ESG) factors has gained pace. With an emphasis on net income and profit margins, this study analyzes the connection between ESG ratings and financial performance in the Canadian energy sector. A mixed-methods approach including qualitative and quantitative studies was used to look at data from the top 10 Canadian energy companies in 2023. The study discovered a favourable relationship, especially with regards to net income, between ESG rankings and financial performance. Profit margins and ESG scores did not, however, have a strong or statistically significant correlation. Future research should look into non-linear modelling techniques, enhance the sample size, and consider other ESG factors. Overall, the results highlight how crucial it is to include sustainability in investment plans to create long-term benefits for society.
