Abstract
The aim of this work is to understand the role of the Environmental, Social and Governance (ESG) paradigm in the corporate assessment by investors and the use of this paradigm as guide for managerial decision-making process by corporations. A review of the international literature is provided using five different couples of keywords on Thomson Reuters ISI Web of Knowledge research engine. The literature production increased only after the 2007 crisis and the median year of the results is 2011, thus highlighting just a recent attention to themes as ethics and corporate social responsibility. Main limitations are related to the classic limitations of literature reviews, as the choice of number and type of keywords and journals, the resulting selection of studies, the choice of relevant outcomes and the interpretation, generalization and application of results. The study provides both theoretical and practical implications: a complete review of contributions on the theme is provided; then, some insights in investors and corporations behaviors through the ESG lens, thus suggesting a more ethical and responsible behavior in investment decision-making processes.
Highlights
Looking at the main causes of financial crises, it is necessary to understand what the real root of the problem is
Over the twentieth century scant attention has been paid to themes such as ethics, sustainability, and responsible investments, both by academic theories and financial practitioners, and the results are under our eyes (e.g., Stachowicz-Stanusch & Mangia, 2016)
Underestimation of unethical behaviors may lead to severe consequences (Stachowicz-Stanusch & Mangia, 2016)
Summary
Looking at the main causes of financial crises, it is necessary to understand what the real root of the problem is. Over the twentieth century scant attention has been paid to themes such as ethics, sustainability, and responsible investments, both by academic theories and financial practitioners, and the results are under our eyes (e.g., Stachowicz-Stanusch & Mangia, 2016). The last twenty years, have been abundant in numerous examples of corruption scandals and unethical behaviors in modern organizations and instances of management misconduct that have eroded public faith (such as Enron, WorldCom, Tyco, Adelphia, Arthur Andersen, & Parmalat). Their unawareness of the risk associated with management misconduct resulted in the erosion of public trust to their organizations and in the collapse of profitable corporations. Underestimation of unethical behaviors may lead to severe consequences (Stachowicz-Stanusch & Mangia, 2016)
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