THE IMPACT OF ESG TRANSFORMATION AND MACROECONOMIC SHOCKS ON CORPORATE FINANCE: ADAPTATION OF CAPITAL STRUCTURE AND VALUE OF EMERGING MARKET FIRMS

Abstract

The objective of the study is to develop a methodology for quantitatively assessing the impact of sovereign ESG ratings and macroeconomic shocks on the cost of debt capital and optimizing the capital structure of companies in emerging markets. The main results of the study: theoretical approaches to modifying classical theories of capital structure, taking into account the stakeholder approach and resource dependence, have been systematized; an econometric modeling design has been developed on panel data, including 2,646 corporate bond issues of 404 Russian issuers for the period 2019-2025 and a comparative sample of companies from the BRICS countries; preservation of the “green premium” in the context of a tight monetary policy has been proven, while for the real sector the discount to the credit spread is 17.3 bp, and for the financial sector the management component (G) ensures a spread reduction by 141.5 bp, environmental (E) and social (S) initiatives are perceived by investors as agency costs; Using stress testing, we found that the protective effect of an ESG rating increases nonlinearly with increasing macroeconomic stress, acting as an option to reduce risk. We also substantiated strategies for replacing external debt with domestic instruments and transforming corporate governance while reorienting toward Asian capital markets. Finally, we concluded that the current paradigm of corporate finance in emerging markets, based on classical leverage determinants, implies a reorientation toward the institutional space, where ESG transformation serves as a mechanism for reducing the cost of capital and ensuring access to liquidity. The approach proposed in the study can be used by financial directors to justify the costs of ESG transformation to boards of directors, regulators, and development institutions to establish a national taxonomy and verification infrastructure, as well as by institutional investors to minimize ongoing risks in the face of macroeconomic turbulence.