Environmental, Social, and Governance (ESG) Investing: Doing Good to Do Well

Abstract

The COVID-19 crisis has been a litmus test for old-style shareholder capitalism. As the world emerges from the tyranny of the virus, new standards of organizational behaviors will be expected: one where humankind demands that organizations fulfill a broader purpose and has at its center enhancing societal value and contribution. The environmental, social and governance (ESG) factors of the organizations now become important yardsticks of measuring a resilient organization, and therefore, a sustainable society. Gone are the days when what was good for business, was good for the society. A new frame is evolving which inverses the proposition, i.e., what is good for the society is good for business. ESG is that new frame. The article explores this paradigm shift in thinking. It explores academic literature on the evolution of ESG investing, illustrating its application in one organization as a case study Unilever and then addressing important ways of measuring ESG. The article concludes with challenges that ESG faces today and in moving forward. Overall, the objective of the article is to provide a short synthesis of the evolution of ESG as an important new organizational success measure demanded by the society, particularly due to experience of the pandemic and related crises during 2020.

Proposing an Integrated Approach to Analyzing ESG Data via Machine Learning and Deep Learning Algorithms

“…It is closely related to solving various problems regarding social inequality, corporate governance problems, climate change, working environment, and sustainability that humanity faces [3,4]. The importance of the ESG was elevated in the COVID-19 era [5][6][7]. According to a report by BlackRock, people have concentrated more on how companies responded to the crisis, such as dealing with employees or customers [8].…”

“…According to a report by BlackRock, people have concentrated more on how companies responded to the crisis, such as dealing with employees or customers [8]. In the COVID-19 pandemic, people have comprehended the concept of ESG through direct experience, and this experience also affected the view of the investors [6,7]. The ESG index is now vital for both companies and investors since investors consider it as an important factor in investment decisions [9,10], which influences the future performance of the companies.…”

Pengaruh Pengungkapan Environmental, Social Dan Governance (Esg) Terhadap Kinerja Perusahaan Pada Perusahaan Sub Sektor Pertambangan Batu Bara Periode 2017-2022

“…ESG pada dasarnya ialah taksonomi luas yang menentukan keharusan nonfinansial untuk suatu organisasi (Krishnamoorthy, 2021). ESG merupakan praktik dalam mengukur, mengungkapkan serta mempertanggungjawabkan kepada seluruh pemangku kepentingan (Almeyda & Darmansya, 2019).…”

Environmental, social and governance and financial performance nexus in South African listed firms

“…Environmental, social and governance disclosures have evolved beyond mere compliance; they are increasingly seen as a strategic approach to engage stakeholders, meet investor expectations, enhance credibility and remain competitive in the industry (Sultana et al 2018). Some companies view sustainability as a competitive advantage, while others consider it a standard practice (Krishnamoorthy 2021). However, the adoption of sustainability practices is a nuanced and evolving process over time, with corporations worldwide voluntarily integrating more ESG practices, suggesting potential economic benefits (Denhere 2022).…”