Abstract
Progress on Environmental, Social and Governance (ESG) issues is vastly different depending where in the world you look. However, the literature on what drives ESG performance is highly fragmented and current theories fail to offer useful insights into the disparity in ESG performance. Hence, this study draws upon an accumulated body of knowledge of ESG-related literature and explores the major drivers of ESG performance. By applying a scientific and replicable methodology of systematic literature review, this article reveals the fundamental debate underpinning ESG responsibility, the breath of pertinent stakeholders, the theories necessary to understand ESG management and the conditions which will best achieve ESG progress. The major themes help inform the most effective choice of mechanisms to improve ESG outcomes. However, there are also significant themes not yet fully developed in the literature. Future research is urgently needed on the impact of economic development, regulatory environment and responsible investing on ESG outcomes. These research trajectories hold important implications for investment management, corporate strategy and government policies affecting global ESG performance.
Highlights
Global Drivers for ESG Performance: The impacts of climate change that face the international community are global in scope and unprecedented in scale
Two researchers carried out this manual review to effectively triangulate the selection
HistCite was employed to map citation patterns between the identified articles as well as to references not yet in the collection. This enabled the identification of another 35 articles on ESG drivers which had significant influence
Summary
Global Drivers for ESG Performance: The impacts of climate change that face the international community are global in scope and unprecedented in scale. Holding temperatures at 2◦ above pre-industry levels would require a dramatic shift in public and private investments from fossil fuels to more climatefriendly alternatives [1]. It will necessitate coordinated actions and collaborative efforts from various societal stakeholders to strengthen the global response to climate change. To meet the growing demand for this form of responsible finance, Environmental, Social and Governance (ESG) scores are increasingly used as a tool to assess the alignment with transition pathways to sustainability (in general, ESG scores are employed to evaluate individual companies but can be applied to evaluate countries and regions)
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