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Restoring trust in ESG investing through the adoption of just transition ethics

Author

Listed:
  • Aoife M Foley

    (University of Manchester [Manchester])

  • Raphael Heffron

    (TREE - Transitions Energétiques et Environnementales - UPPA - Université de Pau et des Pays de l'Adour - CNRS - Centre National de la Recherche Scientifique, CAM - University of Cambridge [UK])

  • Dlzar Al Kez

    (University of Manchester [Manchester], QUB - Queen's University [Belfast])

  • Dylan D Furszyfer del Rio

    (University of Sussex)

  • Celine Mcinerney

    (UCC - University College Cork)

  • Andrew Welfle

    (University of Manchester [Manchester])

Abstract

The prominent growth in environmental, social and governance (ESG) investment is evident, with the number of global assets managed sustainably more than doubled over the last decade. This trend is expected to continue until 2030. This type of financial data is positive but given the United Nations stated 'climate emergency' and 'climate survival' in society today, there needs to be an even greater acceleration of growth in ESG investment. Unfortunately, significant negativity has emerged on ESG in recent years. This 'Cutting Edge' study explores the reasons why and how ESG investment has veered off the journey towards enabling society to achieve both its targets under the 2030 United Nations Sustainable Energy Agenda and the 2015 Paris Agreement. It examines the factors prompting leading multinational companies, particularly in the energy and food sectors, to shift their corporate strategies. The key message advanced is that ESG frameworks and guidelines are not problematic; rather, the issue lies in the practice of ethics in decision-making within corporations. Addressing this ethical challenge, which is at the heart of ESG practices, across different professions and disciplines can rebuild trust among stakeholders in ESG investing. This form of interdisciplinary ‘just transition ethics' can re-orient us back on the journey towards a just and sustainable world

Suggested Citation

  • Aoife M Foley & Raphael Heffron & Dlzar Al Kez & Dylan D Furszyfer del Rio & Celine Mcinerney & Andrew Welfle, 2024. "Restoring trust in ESG investing through the adoption of just transition ethics," Post-Print hal-04591317, HAL.
    • Handle: RePEc:hal:journl:hal-04591317
    DOI: 10.1016/j.rser.2024.114557
    Note: View the original document on HAL open archive server: https://hal.science/hal-04591317
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    References listed on IDEAS

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    1. Eduardo Duque-Grisales & Javier Aguilera-Caracuel, 2021. "Environmental, Social and Governance (ESG) Scores and Financial Performance of Multilatinas: Moderating Effects of Geographic International Diversification and Financial Slack," Journal of Business Ethics, Springer, vol. 168(2), pages 315-334, January.
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    More about this item

    Keywords

    Environmental; ESG factors; Ethics; Global finance; Just transition; Sustainable finance; social and governance UN SDGs United;
    All these keywords.

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