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A survey on ESG: investors, institutions and firms

Author

Listed:
  • P. Raghavendra Rau
  • Ting Yu

Abstract

Purpose - Over the past two decades, the topics of Environmental, Social and Corporate Governance (ESG) and Corporate Social Responsibility (CSR) have attracted an increasing amount of interest, reflecting a growing sensitivity of investors and corporations towards environmental, social and governance issues. Design/methodology/approach - This survey offers an overview of the academic literature on ESG/CSR through the lens of investors, institutions and firms. We first discuss the definitions of ESG and CSR and their relationship to each other. Findings - We next describe how ESG is measured and note problems with the measurement of and quality of ESG data and discrepancies between different measures of ESG. We then turn our attention to investors, examining what types of investors invest in ESG and the role of institutional investors in ESG. From the firm's perspective, we discuss why firms themselves conduct ESG. We also summarize the literature on the impact of ESG on firms: how ESG affects firms' financing, disclosure and reporting activities and firm performance. Finally, we describe other consequences of the focus of ESG and CSR on firms and investors. Originality/value - This survey offers an overview of the academic literature on ESG/CSR through the lens of investors, institutions and firms.

Suggested Citation

  • P. Raghavendra Rau & Ting Yu, 2023. "A survey on ESG: investors, institutions and firms," China Finance Review International, Emerald Group Publishing Limited, vol. 14(1), pages 3-33, January.
    • Handle: RePEc:eme:cfripp:cfri-12-2022-0260
    DOI: 10.1108/CFRI-12-2022-0260
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    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Yan, Min & Gong, Xinshu, 2024. "Impact of green credit on green finance and corporate emissions reduction," Finance Research Letters, Elsevier, vol. 60(C).
    2. Liu, Ziqiang & Gao, Xin & Xu, Hao & Xu, Weidong, 2024. "Climate change exposure and stock liquidity commonality: International evidence," Pacific-Basin Finance Journal, Elsevier, vol. 86(C).
    3. Wu, Zihao & Lin, Siliang & Chen, Tianhao & Luo, Chunyang & Xu, Hui, 2023. "Does effective corporate governance mitigate the negative effect of ESG controversies on firm value?," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1772-1793.
    4. Bigelli, Marco & Mengoli, Stefano & Sandri, Sandro, 2023. "ESG score, board structure and the impact of the non-financial reporting directive on European firms," Journal of Economics and Business, Elsevier, vol. 127(C).
    5. Salvatore Esposito De Falco & Raffaella Montera & Sabrina Leo & Francesco Laviola & Pietro Vito & Domenico Sardanelli & Gianpaolo Basile & Giulia Nevi & Raffaele Alaia, 2024. "Trends and patterns in ESG research: A bibliometric odyssey and research agenda," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 3703-3723, September.
    6. Xu, Weidong & Huang, Wenxuan & Li, Donghui, 2024. "Climate risk and investment efficiency," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 92(C).
    7. Yajuan Tian, 2024. "Will Informal Institutions Affect ESG Rating Divergence? Evidence from Chinese Confucian Culture," Sustainability, MDPI, vol. 16(22), pages 1-21, November.
    8. Xue, Qinyuan & Jin, Yifei & Zhang, Cheng, 2024. "ESG rating results and corporate total factor productivity," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    9. Md. Sazib Miyan & Calvin W. H. Cheong & Arshian Sharif & Sahar Afshan, 2024. "Three Decades of Green Finance: The State of the Art and Way Forward," International Journal of Energy Economics and Policy, Econjournals, vol. 14(6), pages 88-105, November.
    10. Foglia, Matteo & Miglietta, Federica, 2024. "Does every cloud (bubble) have a silver lining? An investigation of ESG financial markets," Journal of Behavioral and Experimental Finance, Elsevier, vol. 42(C).

    More about this item

    Keywords

    ESG; CSR; SRI; Firm performance; Firm value; G11; G30; G32; Q01; Q51; Q56;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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