ESG and sustainability: the impact of the pillar social

Abstract

This study focused to understand the impact of the social pillar of ESG (Environmental, Social, and Governance) practices on the sustainability of organizations. A systematic review of the literature was carried out and the analysis of these articles revealed that in recent years investors have shown a growing interest in ESG, guided by financial value. ESG data, scientifically grounded and focused on investments, offers greater transparency to investors, but faces challenges in defining metrics due to the distinct nature of the three pillars. Companies with better ESG performance also contribute to community development. However, the social dimension of ESG has received less attention than the environmental and economic dimensions. Human-centric organizations that use ESG practices make an impact on the environment by implementing sustainable measures that reduce health risks and workload. In the social sphere, labor management, diversity and inclusion programs increase satisfaction and productivity at work. In corporate governance, improved strategies should consider employees' occupational stress and gender diversity in senior management and boards, as it plays a key role in ESG disclosure and performance. There are gaps in the literature regarding the three ESG pillars, especially regarding the social dimension and diversities. The lack of academic consensus on the impact of engaging in ESG practices indicates the need for more studies and empirical research to advance knowledge about ESG and sustainability in organizations. Overcoming these limitations can allow for a better understanding and effective implementation of ESG practices, boosting organizational sustainability.