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The ESG Patterns of Emerging-Market Companies: Are There Differences in Their Sustainable Behavior after COVID-19?

Author

Listed:
  • Barbara Rocha Gonzaga

    (IAG Business School, Pontifical Catholic University of Rio de Janeiro, Rio de Janeiro 22451-900, Brazil)

  • Marcelo Cabus Klotzle

    (IAG Business School, Pontifical Catholic University of Rio de Janeiro, Rio de Janeiro 22451-900, Brazil)

  • Talles Vianna Brugni

    (Finance and Accounting Department, FUCAPE Business School, Vitória 29075-505, Brazil)

  • Ileana-Sorina Rakos

    (Faculty of Sciences, University of Petrosani, 332006 Petrosani, Romania)

  • Ionela Cornelia Cioca

    (Faculty of Economic Sciences, 1 Decembrie 1918 University, 510009 Alba-Iulia, Romania)

  • Cristian-Marian Barbu

    (Faculty of Management-Marketing, Artifex University of Bucharest, 060754 Bucharest, Romania)

  • Teodora Cucerzan

    (Faculty of Economic Sciences, 1 Decembrie 1918 University, 510009 Alba-Iulia, Romania)

Abstract

We aim to map the ESG patterns of emerging-market companies from 2018 to 2021 in order to determine whether the COVID-19 pandemic exerted any influence on sustainable corporate behavior. Thus, the ESG performances were assessed by employing the Kohonen Self-Organizing Map (also known as the Kohonen neural network) for clustering purposes at three levels: (i) ESG overall, including country and sectoral perspectives; (ii) ESG thematic; and (iii) ESG four-folded (stakeholder, perspective, management, and focus strategic views). Our results show that emerging-market companies focus their ESG efforts on social and governance issues rather than on environmental. However, environmental and social behavior differ more acutely than governance behavior across clusters. The analyses of country-level ESG performance and that of eleven market-based economic sectors corroborate the geographic and sector dependence of ESG performance. The thematic-level analysis indicates that operational activities and community issues received more attention, which suggests that emerging-market companies address distinct ESG topics according to their particularities and competitiveness. Furthermore, our empirical findings provide evidence that the ESG behavior of companies has changed over the course of the COVID-19 pandemic. Thus, our findings are relevant to policy makers involved in regulating ESG disclosure practices, investors focused on enhancing their sustainable investment strategies, and firms engaged in improving their ESG involvement.

Suggested Citation

  • Barbara Rocha Gonzaga & Marcelo Cabus Klotzle & Talles Vianna Brugni & Ileana-Sorina Rakos & Ionela Cornelia Cioca & Cristian-Marian Barbu & Teodora Cucerzan, 2024. "The ESG Patterns of Emerging-Market Companies: Are There Differences in Their Sustainable Behavior after COVID-19?," Sustainability, MDPI, vol. 16(2), pages 1-41, January.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:2:p:676-:d:1317872
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    References listed on IDEAS

    as
    1. Felipe Arias Fogliano de Souza Cunha & Erick Meira de Oliveira & Renato J. Orsato & Marcelo Cabus Klotzle & Fernando Luiz Cyrino Oliveira & Rodrigo Goyannes Gusmão Caiado, 2020. "Can sustainable investments outperform traditional benchmarks? Evidence from global stock markets," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 682-697, February.
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