A Systematic Literature Review on ESG during the COVID-19 Pandemic

Abstract

Environmental, social and governance (ESG) issues have been investigated by scholars from several points of view. Although the epidemic of COVID-19 is recent, numerous scholars have analyzed its effects on ESG, making it difficult to systematize current knowledge. This generates the risk that the discussion will become stale. This study aims to provide a systematic literature review able to examine the combination of ESG and COVID-19 outbreak, to understand what the academics discovered. Eighty-five studies were systematically reviewed. We used a systematic literature review which is the tool that can ensure that all relevant data from the topic under investigation are considered. This approach is considered as the most comprehensive and rigorous one because it allows the creation of the advancement of knowledge of the specific topic. We identified five classes plus a residual one that accommodate the main topics analyzed in the literature (investment and stock returns, ESG in specific industries, ESG rating, gender studies, ESG reporting, and other). Our research highlights that most of the studies have been focused on the first three topics, sometimes reaching different or opposite findings, while only few studies have been dedicated on the other topics. Therefore, we state the need for more research into the ESG/COVID-19 combination in the fields of gender diversity and ESG reporting, and for more research able to understand the different findings of the other three identified topics.

Women on boards and ESG performance: empirical evidence before and during the COVID-19 pandemic in Indonesia and Malaysia

“…The results of the second model show that the COVID-19 pandemic variable does not play a moderating role in the relationship between the presence of women on boards and ESG performance. This finding aligns with Savio et al (2023) and del Rio et al (2021), who documented that the Covid-19 pandemic does not significantly affect the impact of gender diversity indexes on companies' sustainability performance because gender diversity is part of their ESG strategy, even during the Covid-19 pandemic crisis. This approach is consistent with other studies (e.g.…”

Does board gender diversity play an important role in environmental and corporate performance?

“…The fact that H8, which states that firm size reduces the effect of GDV on EP, is rejected, provides important information about the small role played by firm size in the relationship between environmental performance and gender diversity. In line with the research of Savio et al (2023), firm size does not significantly moderate environmental performance.…”

The Impact of ESG Scores on Risk Market Performance

“…Many companies are organizing their activities to consider the ESG pillars, which are becoming a new paradigm that links self-interest and individual profit. Indeed, the recent literature has confirmed trends in which a firm using strategies to achieve goals based on ESG targets can create greater shareholder value [48]. The present analysis aimed to investigate the risk market performance in terms of risk-adjusted indicators (that is, the Sharpe ratio and the Sortino index) and the adequacy of tail risk measures (namely, the Value-at-Risk (VaR) and Expected Shortfall (ES)) of a set of listed firms with different ESG scores provided by two agencies: Eikon and Sustainalytics.…”

“…This means that the evaluation could have suffered from the influence of the COVID-19 pandemic. Indeed, recent contributions in the literature found that companies could assume different behaviors in terms of ESG in response to the COVID-19 pandemic [48]. In addition, for this reason, further research involving larger sample periods is needed so that the results of this analysis may be compared with those of subsequent years and may thus be considered more robust.…”