FBA1032 Corporate & Investment Finance Assignment 2025-26 | DCU

FBA1032 Corporate & Investment Finance

The Relationship between ESG Practices and Dividend Policy: Implications for Corporate Financial Management’

Background

Environmental, Social, and Governance (ESG) considerations have become central to corporate financial management and investor decision-making. At the same time, dividend policy remains a core issue in corporate finance, reflecting both shareholder expectations and managerial choices. The intersection of ESG and dividend policy raises important questions:

Do firms with stronger ESG performance distribute profits differently?
How do sustainability commitments influence payout strategies and capital structure decisions?
What are the implications for corporate value, investor preferences, and longterm growth?

Required:

This assignment requires students to critically evaluate these questions by applying theoretical frameworks, empirical evidence, and case analysis.

Working in groups of four, you are required to produce a report that:

1. Literature Review & Theoretical Framework

Summarise and critically evaluate the main theories of dividend policy (e.g., signalling, agency costs, life-cycle theory).
Review the literature on ESG and its impact on corporate financial decisions.

2. Empirical Evidence

Analyse at least two academic studies (peer-reviewed) that examine the relationship between ESG and dividend policy.
Compare and contrast their findings, methodologies, and implications.

3. Case Study Analysis

Select two publicly listed companies (from different sectors and/or geographies) and analyse how ESG performance appears to influence their dividend decisions.
Use publicly available financial reports, sustainability disclosures, and market commentary.

4. Critical Discussion

Assess whether ESG engagement strengthens or weakens a firm’s ability/willingness to pay dividends.
Consider stakeholder perspectives (investors, regulators, managers).
Discuss implications for shareholder wealth maximisation versus stakeholder value creation.

5. Conclusion & Recommendations

Summarise key insights from your analysis.
Provide recommendations for corporate managers and/or policymakers regarding integrating ESG with dividend policy decisions.

Suggested Structure and Word Allocation

Introduction (300–350 words)
Theoretical Framework (600–700 words)
Literature Review & Empirical Evidence (600–700 words)
Case Study Analysis (700–800 words)
Critical Discussion (500–600 words)
Conclusion & Recommendations (250–300 words)
References & Appendices (not included in word count)

Use Harvard referencing style.
Append tables/figures with financial data or ESG scores.
Ensure all references are cited appropriately.
Students must comply with the university’s academic integrity policies.

Ensure all references are appropriately cited.

Generative AI tools (e.g., ChatGPT, Copilot, Gemini) should only be used as support (e.g., for brainstorming, clarifying concepts), not as a substitute for original analysis.
All sources of information, including AI-generated content, must be appropriately acknowledged and referenced if used.
Plagiarism will not be tolerated; ensure all sources are correctly

FBA1032 Assignment Requirements:

Word Count: 3,000 (±10%) words
Assignment Weight: 20% of overall module grade
Format: The assignment should be typed, double-spaced, using a size 12 font