Environmental, Social And Governance Research Articles

ESG's Global Dissemination and Impact: A Cross-Cultural Perspective

This study explores the global dissemination and impact of ESG (Environmental, Social, and Governance) from a cross-cultural perspective. By comparing practices and feedback across different cultural backgrounds, the study reveals the similarities and differences in ESG concepts among various countries and regions. It finds that cultural factors significantly influence the implementation and acceptance of ESG, with diverse attitudes and behaviors towards ESG across cultures. The dissemination of ESG is constrained by cultural differences, leading to varying degrees of emphasis and methods in ESG practices, which in turn produce different impacts and outcomes. This research delves into the mechanisms and pathways of ESG dissemination in a cross-cultural context, providing crucial references for multinational enterprises in formulating ESG strategies and policies. By analyzing and comparing ESG practices and effects across different cultural backgrounds, the study offers new insights and methods for promoting the global dissemination and implementation of ESG principles.

Review of ESG Information Disclosure under the New Development Concept

Abstract: With continuous development in the ESG (Environmental, Social, and Governance) field in China, the understanding of the concept and role of ESG by Chinese enterprises and related scholars has been deepening. However, issues such as the lack of uniform standards and frameworks for information disclosure, poor quality of information, and even greenwashing have gradually emerged in ESG information disclosure. The new development concept serves as a guiding principle for Chinas development, providing scientific direction for economic growth. The three major components of ESG closely align with the five principles of the new development concept, and the deficiencies and problems in ESG information disclosure profoundly affect the new development concept. Therefore, this paper aims to comprehensively review related research on ESG information disclosure and propose solutions to the identified problems based on the context of the new development concept.

ESG Information Disclosure and Innovation in New Energy Enterprises: A Case Study of CATL

Abstract: In recent years, ESG (Environmental, Social, and Governance) information disclosure and related ratings have garnered increasing attention from the public and enterprises. ESG information disclosure has gradually become an important way for enterprises to fulfill social responsibility. It not only meets the information needs of various stakeholders but is also closely related to corporate innovation, bearing significant implications for long-term corporate development. This paper employs a combination of literature research and case study methods, selecting CATL (Contemporary Amperex Technology Co., Limited), a representative enterprise in the new energy sector, as a typical case study. By analyzing data and business activities from CATLs ESG reports over the past five years, the relationship between ESG information disclosure and corporate innovation is explored. Additionally, this study incorporates LONGi Green Energy, another industry benchmark, for horizontal comparative analysis to reinforce the research findings. Based on the existing conclusions, the paper further delves into the long-term impacts of the mechanism of ESG information disclosure and corporate innovation. The research results indicate that ESG information disclosure can promote corporate innovation, fostering a virtuous cycle between the two and laying a foundation for the future development of enterprises.

The Value Effect of ESG Performance and Corporate Governance Innovation in Chinese Enterprises under High-Quality Development

Abstract: This paper arises from the ongoing development of ESG (Environmental, Social, and Governance) information disclosure and governance in recent years, and the academic interest in these areas. While numerous discussions on ESG information disclosure and governance exist, a comprehensive review and summary are still lacking. This paper focuses on academic research on the application and innovation of ESG information disclosure and governance in Chinese enterprises, aiming to provide research directions and perspectives for future researchers. The main data sources for this study are CNKI and CSSCI, selecting papers and journals from the past ten years and using Citespace to analyze the collected data. The results show that corporate value is closely linked to consumer interests. Through innovations in ESG governance models, operational risks are reduced, resource utilization is improved, and the social functions of enterprises are highlighted, achieving sustainable development.

Mechanism of ESG System Construction Promoting Sustainable Financial Development under the "Dual Carbon" Goals

Abstract: China is advancing green and low-carbon development in a coordinated manner, and at the 75th session of the United Nations General Assembly, China officially proposed the goals of carbon peaking and carbon neutrality. The "dual carbon" strategy is an essential path to achieving green and sustainable development, as well as a necessary measure to enhance the momentum of high-quality economic growth. The construction of the ESG (Environmental, Social, and Governance) system is a crucial factor influencing the development of green finance, and the importance of green finance and sustainable development for high-quality corporate and social development is further elevated. This paper analyzes the significance of ESG system construction for the green transition of the economy and society. Based on the development status of ESG practices domestically and internationally, and grounded in the issues and needs of the domestic economic and social green transition, this study explores the mechanism by which ESG system construction promotes the sustainable development of finance.

Environmental, Social and Governance Awareness and Organisational Risk Perception Amongst Accountants

The relationships between accountants’ environmental, social and governance (ESG) awareness and their perceptions of organisational risk are examined in this study. The emphasis is on the operational, strategic, financial and compliance risks of business organisations. A total of 462 accountants in Hong Kong were included via stratified random sampling and snowball sampling to ensure population diversity. A stratified random approach was used to include factors such as age, gender, income and experience, and snowball sampling amongst professional networks was used to ensure representativeness. A significant positive relationship exists between ESG awareness and risk perception, with environmental and governance factors emerging as the strongest predictors. Accountants with deep ESG awareness, especially in the aforementioned areas, can successfully identify and manage nontraditional risks such as regulatory changes and environmental threats. The findings highlight the need for institutionalising ESG-focused education in accounting and corporate governance to improve risk management capabilities. Increased ESG awareness can ensure responsible and sustainable business behaviour. Future research can expand the sample of accountants to executives and use longitudinal designs to capture the dynamic nature of ESG awareness and risk perception.

Probabilities of transitions among endogenous regimes in asset returns and Environmental, Social and Governance scores

AbstractAssets' returns can be efficiently clustered in regimes, that are suitably defined non‐overlapping intervals creating a partition of the real numbers. This paper explores the relationship between the transition probabilities from one regime to another in assets' returns and the assets' MSCI Environmental, Social and Governance (ESG) scores. We apply the proposed methodology to the relevant empirical instance of the assets in the STOXX® Global 1800 Index. We consider three regimes—low, medium and high, on the basis of the variation range of the considered returns. Regimes are endogenous, in that their identification comes out from an entropy‐based optimization problem over the possible ranges of variation of the returns. We specifically investigate the possible linear relationship between transition probabilities among regimes and the ESG scores for different geographic regions, namely, America, Europe and Asia Pacific. The reference empirical period is the quadrennium 2018–2021. Results suggest that assets that are low ranked in ESG tend to remain in the low state of returns, if they are in the low state, while they tend to switch from higher to lower return states when the initial state is higher. On the other hand, assets that are highly ranked in the ESG dimensions, are likely to switch from a lower to a higher return state, when they are in a lower state or to remain in the same state when they are in a higher state. Results are more evident for America and Asia Pacific regions rather than Europe where regulation on ESG integration is at a more developed stage with respect to the other regions.

A Study on Evaluating Determinants of Factors Influencing Environmental Social and Governance (ESG) Investments

Investments that take social responsibility, environmental sustainability, and corporate governance into account are referred to as ESG investments. It supports businesses that put sustainability and moral behavior first to foster long-term success. Financial gains can be obtained through ESG investments while ensuring beneficial social benefits and risk management. The increasing recognition of ESG investments as an essential aspect of sustainable finance, that emphasise the significance of grasping the variables influencing investor choices in this field. The purpose of the study was to evaluate determinants of Factors influencing ESG investments. The technique used in the current study is the Structural Equation Model. The findings of the study indicated that there is a significant impact of attitude, Environmental concern, perceived behavioral control, and subjective norms on behavioural intention towards ESG investments. The study is extended by adding Environmental concern construct to the base theory of planned behavior.

Nexus supplier transparency and supply network accessibility: effects on buyer ESG risk exposure

PurposeThis paper investigates the role of nexus supplier transparency, which involves the collective information disclosure to the public by second-tier nexus suppliers, as an alternative mechanism for mitigating buyer environmental, social and governance (ESG) risk exposure. We also examine buyer supply network accessibility as a moderating factor that facilitates collecting detailed information and undertaking corrective actions accordingly.Design/methodology/approachWe collected a sample of 428 focal buyer firms and their supply networks up to third-tier suppliers. Data were obtained from Bloomberg and RepRisk databases. We identified critical nexus suppliers using data envelopment analysis (DEA) and tested hypotheses using regression analysis.FindingsThe results show that the benefits of nexus supplier transparency, such as reducing buyer ESG risk exposure, differ depending on the type of nexus supplier disclosing information and buyer supply network accessibility. Informational nexus supplier transparency was found to be beneficial. However, the results revealed the double-edged sword of monopolistic nexus supplier transparency, which benefits buyers with higher levels of accessibility but increases risk exposure for buyers with lower accessibility.Originality/valueThis study demonstrates that the transparency of critical second-tier suppliers mitigates buyer ESG risk exposure by providing information about lower tiers in the supply network. Challenging the notion of the focal buyer as the main orchestrator of supply chain initiatives, our alternative perspective opens a new avenue for risk management in multi-tier supply chains.

Climate risk perception and corporate ESG performance: evidence from China

PurposeThis study examines the impact of climate risk perception on corporate environmental, social and governance (ESG) performance from a microfirm perspective.Design/methodology/approachUsing a sample of Chinese listed companies from 2009 to 2021, we constructed corporate climate risk perception indicators based on the Management Discussion and Analysis (MD&A) in the annual reports of the companies, and analyzed it using ordinary least squares regression.FindingsThe results show that climate risk perception improves corporate ESG performance by encouraging green innovation. Heterogeneity analysis suggests that the greater the magnitude of climate risk shocks to the firms, the stronger the risk coping ability and the weaker the environmental regulation, the more pronounced the improvement of climate risk perception on corporate ESG performance. Furthermore, economic consequence analysis shows that the enhancement effect of climate risk perception on corporate ESG performance contributes to increasing corporate value.Originality/valueThis study emphasizes the significance of corporate climate risk perception in enhancing ESG performance. It provides a theoretical basis for enterprises to respond to climate risk and sustainable development.

A Study on Evaluating Determinants of Factors Influencing Environmental Social and Governance (ESG) Investments

Investments that take social responsibility, environmental sustainability, and corporate governance into account are referred to as ESG investments. It supports businesses that put sustainability and moral behavior first to foster long-term success. Financial gains can be obtained through ESG investments while ensuring beneficial social benefits and risk management. The increasing recognition of ESG investments as an essential aspect of sustainable finance, that emphasise the significance of grasping the variables influencing investor choices in this field. The purpose of the study was to evaluate determinants of Factors influencing ESG investments. The technique used in the current study is the Structural Equation Model. The findings of the study indicated that there is a significant impact of attitude, Environmental concern, perceived behavioral control, and subjective norms on behavioural intention towards ESG investments.

The Role of ESG Strategy Implementation in Long-Term Value Creation for Companies

In the context of increasing global focus on sustainable development, companies face new challenges and opportunities in creating long-term value. As a core framework for sustainable development, ESG (Environmental, Social, and Governance) strategies are gradually becoming key factors in enhancing long-term value for businesses. This paper systematically explores the role of ESG strategies in long-term value creation, with a focus on analyzing their impact on financial performance, brand reputation, innovation capability, and emerging market opportunities. Through an in-depth analysis of ESG strategy implementation, this paper reveals new opportunities arising from green finance and investment, sustainable supply chain development, policy support, and digital transformation, and proposes specific application strategies for businesses in these areas. The research findings indicate that ESG strategies can not only optimize financial performance and brand image but also drive technological innovation and business model transformation, thus laying a solid foundation for long-term value creation.

Financial performance of emerging market companies during the COVID-19 pandemic: moderating role of sustainability performance

Purpose This study aims to investigate whether sustainability performance (SP) served as a safeguard for firm profitability (FP) and enhanced corporate resilience in emerging markets during the COVID-19 pandemic. Design/methodology/approach Using a sample of 1,091 firms in 25 emerging markets from 2017 to 2021, this study analyses the moderating role of SP on the relationship between FP and COVID-19 by using hierarchical linear modelling at three levels: (a) time-level; (b) firm-level; (c) country-level. Findings The results indicate that during the years 2020–2021, emerging market firms with robust SP showed better FP in the midst of the COVID-19 pandemic. The findings also indicate that all dimensions of sustainability, i.e. environmental, social and governance (ESG), have significantly affected the FP in the post-COVID period. Hence, adhering to ESG principles aids in alleviating adverse financial repercussions during times of crises. Practical implications This study provides valuable insights for companies and policymakers for finding solutions that may assist them in improving SP globally and enduring crises resiliently. The findings are also relevant to institutional investors that consider SP as an investment criteria. Although the COVID-19 pandemic was temporary, the lessons learned could protect firms from future similar global crises. Originality/value This study enhances the understanding of the contingency relationship between sustainability and financial performance by offering up-to-date empirical insights within the context of emerging markets during the pandemic. It demonstrates how different institutional frameworks influenced the SP–FP association during the crisis. Thus, this paper expands the understanding of crisis management literature and bridges the research void concerning the impact of SP on FP in an emerging market context.

BetterFuture Co. and its CO2 Footprint: A Case to Learn About ESG (Environmental, Social and Governance)/GHG (Greenhouse Gas)/CO2, Compliance, and SMART Goal Setting

The case study delves into the complex issue of CO2 footprint from three distinct viewpoints: sustainability, legislative, and managerial. Each perspective offers unique insights into the challenges and opportunities of mitigating greenhouse gas emissions using scope 1, 2, and 3 data. From a sustainability viewpoint, students are encouraged to explore the concept of CO2 footprint within the broader context of ESG considerations. Key questions delve into understanding sustainability frameworks, assessing the impact of CO2 emissions on ecosystems and communities, and exploring strategies for carbon footprint reduction aligned with sustainability goals. From the legislative perspective, students examine the regulatory landscape governing CO2 emissions. Students learn how legal frameworks shape corporate behavior by studying global sustainability goals such as the UN Sustainable Development Goals (SDGs), the Global Reporting Initiative (GRI), and national legislation. Discussion questions focus on analyzing the effectiveness of existing regulations, identifying gaps, and proposing regulatory strategies to incentivize carbon reduction. The managerial perspective emphasizes decision-making and goal-setting within organizations. Students explore how managers can leverage data on CO2 footprint to set SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals for departments or individuals. This involves understanding the role of carbon accounting, evaluating trade-offs in sustainability initiatives, and exploring best practices in integrating sustainability into organizational strategy. The case encourages critical thinking and data analysis, allowing educators to pose additional questions based on student interests and course objectives. The rich dataset allows for extensive exploration beyond the core questions, facilitating interdisciplinary learning across various courses. Ultimately, the case is a versatile teaching tool that can be applied to courses focusing on sustainability, environmental studies, business ethics, managerial decision-making, and public policy. It equips students with the knowledge and skills to navigate the multifaceted challenges of reducing their CO2 footprint while advancing sustainable practices within organizations and society.

Analyzing the dynamic relationship between ESG scores and firm value in Chinese listed companies: insights from generalized cross-lagged panel model

The relationship between a company’s Environment, Social and Governance (ESG) scores and market value dynamics has been the focus of extensive research. Our study aimed to provide insights into this relationship and its implications for Chinese investors. We used a general Cross-lagged panel model to analyze data from 652 Chinese-listed companies from 2013 to 2019. Our findings indicate that ESG scores have a long-term impact on market value, with a consistently positive correlation between the two. We also discovered that Chinese investors consider ESG factors when evaluating a company’s financial health. Companies that prioritize ESG factors are more likely to attract investment. Moreover, the diffusion of ESG information happens slowly, and past ESG performance influences future ESG performance. Thus, maintaining good ESG performance is crucial for long-term sustainability and success. In addition, our analysis reveals significant insights into the interplay between ESG metrics and mandatory disclosure regulations. Specifically, we find that the interaction between average ESG score and mandatory disclosure significantly impacts firm value, suggesting a nuanced relationship between ESG performance and market valuation in the context of regulatory requirements. Overall, our study highlights the importance of considering ESG factors when evaluating financial health and making investment decisions, providing valuable insights for firms and investors alike.

The Importance of ESG in Financing and Investment Decisions

ESG has become one of the most important topics for investors around the world, and this article explores the importance of environmental, social and governance (ESG) factors in financing and investment decisions. This paper first introduces the concept of ESG from the perspective of investment and financing, and analyzes the impact of ESG on financing cost, investor demand and its application in debt financing. This paper further discusses the role of ESG factors in investment evaluation and the correlation between investment returns and ESG performance. Therefore, ESG is becoming more and more important in the process of investment and financing, and enterprises should pay more attention to and actively respond to the development and changes of ESG.

Environmental, Social and Governance (ESG) and Consumer Behavior: Trends Towards Conscious Consumption

Objectives: This study aims to investigate how ESG (Environmental, Social and Governance) contributes to consumer behavior so that they have conscious consumption trends and how ESG can define patters of consumer behavior and trend positively in the behavior relationship of consumption. Theoretical Framework: Contributes to the mapping of the evolution, quantity and journals that published the list of search strings from 2014 to 2024. Method: This qualitative study is a Systematic Literature Review that used Parsifal® Software for the process of choosing and refining articles, which resulted in 81 articles as a final sample. The databases consulted were Web of Science and Scopus accessed on March 5, 2024. “ESG and Sustainable”, “ESG and consumer behavior” and “ESG and conscious consumption” were used as search strings. Results and Discussion: Positive relationships are evident between ESG and consumer behavior for conscious consumption trends, when choosing products and/or services. The implementation of ESG in the company's business can improve the relationship with consumers of its product or service and lead to robust, conscious and lasting behavior. Research Implications: Contributes to the benefits, pillars and how to adopt conscious consumption, in addition to highlighting the relationships between ESG and conscious consumption and the influence of these factors to define consumer behavior patterns. Originality/Value: This study stands out for analyzing the relationship between the adoption of ESG standards and practices and verifying the trend towards conscious consumption arising from the adoption of ESG practices.

유아기 자녀를 둔 부모의 제품구매 태도가 ESG 교육 및 홍보 필요도에 미치는 영향: ESG 중요성의 매개효과

Objectives The purpose of this study is to investigate the impact of parents with young children's product purchasing attitudes on the need for ESG (environmental, social, and governance) education and promotion. Additionally, the study aims to explore the mediating effect of ESG importance in this relationship Methods The study participants consisted of 254 parents with young children residing in Seoul, Gyeonggi, Chungcheong, and Gyeongsang. The trends and normality of the research variables, as well as their reliability coefficients, were examined using SPSS 25.0 and AMOS 23.0. The relationships among the research variables were analyzed using Pearson's correlation analysis. Additionally, structural equation modeling (SEM) was employed to examine the structural relationships. Furthermore, the mediating effect was investigated using the bootstrapping method. Results The research findings are as follows. First, the mean of the research variables was above 4.0, indicating high levels. Additionally, the data met the assumption of normality. Second, the findings indicate a positive correlation between the need for ESG education and promotion and product purchasing attitudes, as well as the importance of ESG and its subfactors, which include environmental importance, social importance and governance importance. Third, the results revealed that attitudes towards product purchasing had a statistically significant impact on the importance of ESG and the need for ESG education. However, attitudes towards product purchasing did not have a statistically significant impact on the necessity of promoting ESG. Additionally, the importance of ESG was found to influence both the need for ESG education and the need for ESG promotion. Fourth, in the process where attitudes towards product purchasing influence the need for ESG education, the importance of ESG partially mediates the relationship. However, in the case of the need for promoting ESG(environmental, social, governance) practices, the importance of ESG fully mediates the relationship. Conclusions The research findings suggest the importance of promoting early awareness of the concept of ESG (Environmental, Social, and Governance) through play.Additionally, the study aims to propose practical approaches to promoteESGpractices, distinguishing between initiatives focused on thehomeenvironment and collaboration in early childhood education.

Environmental, social and governance (ESG) performance and abnormal positive tone

Purpose The purpose of this study is to explore the relationship between environmental, social and governance (ESG) performance and tone management in the annual report. This is based on the notion that managers, driven by personal interests, may use their ESG accomplishments by using an abnormal positive tone to enhance their reputation or career prospects. Design/methodology/approach Using panel data from Chinese listed companies from 2010 to 2022, this study first investigates the relationship between ESG performance and abnormal tone management. The study then uncovers this relationship is mediated through the mechanisms of equity-based incentive and analyst coverage. The conclusions of this paper hold even after a series of robustness tests, such as propensity score matching, Heckman two-stage method and two-stage least squares with instrumental variables. Findings This study finds a positive correlation between ESG performance and the presence of abnormal positive tone in annual reports. Furthermore, the mechanistic analysis reveals that managers in companies with strong ESG performance are motivated to use an overly positive tone, largely due to their vested interests in equity-based compensation. Moreover, in an effort to alleviate the pressure stemming from heightened financial analyst coverage and enhance the impression conveyed through analysts' reports, managers with superior ESG performance also tend to inflate the tone within their annual reports. Practical implications This study provides significant insights into the ongoing dialogue surrounding ESG-related equity incentives, which incentivize managerial manipulation of stock prices through the use of abnormal positive tone. The findings call upon investors to exercise greater vigilance in examining narrative information in annual reports, as abnormally positive tones may not always faithfully represent performance but rather reflect managerial self-interest. Social implications There is an emphasis on the importance of robust oversight mechanisms within corporate governance bodies to curb the manipulation of tone for managers’ personal gain. Originality/value This study enhances the theoretical foundation of ESG studies, offering a holistic perspective on the intricate interplay among ESG performance, managerial behavior and financial markets, with potential implications for researchers, investors and regulators.

The relationship between sustainability and financial performance of South African companies

Orientation: Environmental, social and governance (ESG) performance remains crucial information required by stakeholders as they are interested in monitoring whether companies contribute to sustainability or not.Research purpose: The study’s purpose was to determine how the sample companies scored on the three pillars of ESG performance and to determine the relationship between ESG scores and the financial performance of selected South African listed companies, with special reference to the impact of coronavirus disease 2019 (COVID-19) on that relationship.Motivation for the study: Because of crises such as the COVID-19 pandemic, companies tend to focus on their ESG-impact, resulting in them investing in sustainable operations.Research approach/design and method: Linear mixed-effect regression analysis models were developed to determine the relationship between ESG scores and financial performance. The sample consisted of 104 companies listed on the Johannesburg Stock Exchange (JSE) from 2017 to 2022.Main findings: We found that companies do not equitably score on the ESG performance pillars. We also found the following significant relationships: (1) Return on equity (ROE) positively impacts governance performance, (2) ESG positively impacts Tobin’s Q and (3) governance performance positively impacts ROE. Furthermore, the results show that sustainability and financial performance before and after COVID-19 are mainly not meaningful.Practical/managerial implications: New insights are revealed in the interests of shareholders, potential investors and company management regarding how to interpret the relationship between ESG pillars and financial ratios.Contribution/value-add: We contribute to the theory as a conceptual framework was developed to interpret the results within the shareholder’s theory.