Environmental, social and governance (ESG) activity and firm performance: a review and consolidation

By D. Huang. Accounting and Finance, 2019

485 citations recorded by the source corpus.

Interest in why firms conduct environmental, social and governance (ESG) activity is longstanding and increasing. Our understanding, however, remains fragmented with alternative accounts that seek to explain the relationship between ESG performance (ESGP) and corporate financial performance (CFP). This paper reviews alternative accounts for the relationship and finds that the weight of empirical evidence shows a positive, statistically significant but economically modest ESGP-CFP link, consistent with theoretical expectations. This economically modest relationship suggests ESG activity is unlikely to be primarily motivated by narrow measures of CFP. Further scholarship viewing ESG as part of overall firm activity would be constructive.

Subfields: Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/e7ef30218bf25360dd900b9b36d661ce51a6d510

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In Strategy and Management

1. Ida Claudia Panetta
2. Sabrina Leo
3. M. La Torre

Citations in the corpus

• Banks and environmental, social and governance drivers: Follow the market or the authorities? (2021, background): “There is a significant part of literature that underlines the evolution of CSR and ESG and their related issues (Carroll, 2008; Sheehy, 2015; Montiel & Delgado-Ceballos, 2014; Huang, 2019).”