Table 4 ESG impacts and critical analysis.
Criterion | Main impacts identified | Major gaps filled | Main contributions | Main limitations | Critical analysis | Ref. no. Table 3 |
|---|---|---|---|---|---|---|
Environmental | - Water pollution - Soil degradation - Air Pollution - Solid Waste - Energy consumption - Renewable Energies - Recycling - Green Innovation | Sustainable supply chain interventions, social responsibility and human capital benefiting activities in the environmental sector. Innovative profiles (green sustainability) and varieties of institutional systems associated with environmental performance. Transnational sustainability strategies outside the market and profitability in environmental performance. Management control to improve the quality and quantity of ESG disclosures for an environmentally sensitive sector. | The theoretical implications of the study are in the direction with focus on ecological modernization theory. The assumption that sustainability performances have their financial advantages. The actions of environmental responsibility are essential to enhance the profitability of the company, contribute to eradicate extreme poverty. Awareness of managers especially in environmental directions and recognition of human capital in order to improve the financial performance of companies. Supplying environmental policies in order to improve corporate sustainability practices. | Companies were not incorporated into the study due to lack of ESG data. The results of the study cannot be generalized due to the proportion of data. Reduced availability of data for longer time series. The observed results are limited to a specific sector, not confirming an overall picture. Adopted techniques may result in biases due to variables that have not been studied. | Corporate environmental initiatives have direct positive impacts on innovation performance. This indicates that these strands are characterized by positive signals in organizational image, which increases stakeholders’ trust and leads to their heterogeneous resources, resulting in company innovation. Companies that already adopt ESG practices have significant positive impacts on environmental performance, implying ecological modernization. There are significant and favorable direct influences of human capital characteristics on environmental performance that should be implemented as a value creation strategy and key tool for sustainable development. There is evidence that improved accountability, transparency and stakeholder trust as a consequence of incorporating and disclosing a robust framework combining the three ESG pillars in the organization strengthens corporate sustainability performance. | [1], [2], [11]–[20], [3], [21], [22], [4]–[10] |
Social | - Gender Diversity - Remuneration policy - Intellectual empowerment - Equal Opportunity - Community social actions - Investment in innovation - Culture and religion - Relationship with stakeholders | The effect of gender diversity on the board of directors, executive committee, and audit committees. Institutional difference hypothesis, institutional strategies and the social relationship. Remuneration policies based on ESG criteria. Social performance and stakeholder benefits. Bidirectional connections between social responsibility performance and cultural and intellectual actions. | Helps find nuances that explain the mixed results on the relationship between social responsibility and financial performance in developed and emerging countries. Relationship between gender diversity in the boardroom and corporate financial performance. The effects of female participation in mutual fund management teams. Policies to improve corporate governance practices by encouraging diversity and avoiding concentration of power. How the level of religiosity influences the extent of companies’ ESG disclosure. The influence of intellectual capital on social development. | Organizational level analysis, individual level measures that would focus on worker perception. Lack of information on compensation policies and studies that include different compensation structures. Shortage of information about the social responsibility committee. Explore different legal and/or institutional contexts to analyze gender diversity and ESG information attributes. Disregard of the impact of religiosity on small and medium-sized companies. Exploring managers' religiosity and its impact on their ESG disclosure decisions. The relationship between board characteristics and corporate social performance may be affected by endogeneity bias. | Institutional weaknesses affect the corporate social performance of companies. This may be because in such circumstances companies are more likely to prioritize capital accumulation and not recognize the potential strategic benefit of socially responsible investments. The argument for introducing gender diversity on the board is based on what this diversity brings in terms of a cognitive framework that allows directors to better understand institutional weaknesses from different perspectives, creating a positive effect on company value. Another factor that contributes to institutional improvement is gender-equal compensation policies, as they are designed to reward past behavior and influence future behavior, playing a key role in human resource management. Gender diversity is a key variable that impacts the company’s socially responsible performance, making the disclosure of ESG information more comprehensive and useful to stakeholders. | [1], [2], [11]–[19], [23], [3], [24]–[33], [4], [34]–[38], [5]–[10] |
Governance | - Audits - Financial performance - Competitiveness - Human capital - Compensation policies - Fighting corruption - Transparency - Enterprise value (capital) | The impact of audit committee activism and independence on the quality and quantity of ESG disclosures. The effects of transparency and anti-corruption on the financial performance and competitiveness of companies. Analysis of human capital and value-added relationship between stock prices and the level of ESG performance. The effects of intensity and influence of ESG incidents on contract values and quantity. | The impact of audit committee attributes, independence, and activism on the transparency and quality of ESG disclosures, and on anti-corruption. The relationship between ESG incidents and bank loan agreements. Investments made toward sustainability can be considered a business opportunity that is preserved over time through added economic value. Companies that appoint a sustainability and/or governance committee tend to engage in more impactful social and environmental activities. Policymakers, executives, and shareholders, support board participation among women, independent directors, and the formation of sustainability committees to ease engagement in effective social activities. | More current analysis period with the goal of including a broader sample. Limitation in data availability and depth of various board characteristics to institute some level of internal governance. Policy that strongly permeates companies but was not analyzed. Sectoral study and focuses on multinational companies in a certain area. Data set limited to companies in a given country and cannot generalize. Not paying attention to the separate effects of particular events or political regimes that made up the current situation of political volatility. Restriction to the analysis of accounting performance parameters. Restriction to defining competitive advantage only to the resource-based competitive advantage of firms. | The vital role of governance requires sufficient independence and engagement to achieve a balance between managerial and stakeholder goals regarding ESG disclosures, and this can be acquired through audit committees. That said, companies take a strategic position with respect to governance and employ managerial discretion to voluntarily disclose ESG requirements. In this way, corporate governance performance is evaluated positively and significantly by stakeholders. Companies should be encouraged to continuously improve their governance performance and show their ESG reporting and ratings, thereby attracting more investment. Governance performance can be interpreted as a measure of management quality, representing the company’s ability to address long-term trends while supporting a competitive advantage by improving its non-financial indicators such as consumer satisfaction, market acceptance, lower cost of debt, and the social values it brings to its stakeholders. | [1], [2], [11]–[19], [39], [3], [40]–[49], [4]–[10] |
