ESG IN CORPORATE STRATEGY A COMPARATIVE ANALYSIS ACROSS INDUSTRIES
DOI:
https://doi.org/10.29121/shodhkosh.v5.i6.2024.4668Keywords:
Esg Strategies, Corporate Performance, Industry Challenges, Stakeholder Trust, Sustainable DevelopmentAbstract [English]
This research study aims to provide insight into the integration of environmental, social, and governance factors into business strategies within various industries. It examines how companies' ESG practices affect their performance, as well as the challenges faced in executing these practices. With the current growing importance of sustainability, ESG parameters have evolved into a very crucial domain for all companies in order to maintain their long-term profitability while contributing positively to society. The research follows a quantitative approach where data were collected through a structured questionnaire sent to about 400 respondents from different industries in Pune and Mumbai. The study is analyzed using ANOVA and regression analysis in order to find variations in ESG challenges and to examine the relationship between ESG integration and corporate performance.
The analysis shows that ESG strategies have an effect on corporate performance across the disparate industries, with variations in challenges encountered due to sector-specific resource limitations, regulatory pressure, and cost concerns. Industries such as technology and financial services have a lesser load of obstacles; however, energy and manufacturing industries have a higher load of barriers. In spite of the challenges they pose, ESG practices create opportunities for innovation, competitive advantage, and better stakeholder trust. This shows that ESG integration needs to be industry-specific in order to overcome such challenges and maximize long-term value. The study concludes that ESG integration offers significant advantages but requires specific strategies to combat sector-specific challenges. Companies should invest in sustainable technologies and set long-term ESG objectives to make their success tangible. Further, the study recommends that companies engage with stakeholders, build solid ESG frameworks, and align corporate strategies with global sustainability goals. Future research could widen the scope by analyzing other sectors and other regions to render insights into ESG practices in more global markets.
References
Au, A. K. M., Yang, Y.-F., Wang, H., Chen, R.-H., & Zheng, L. J. (2023). Mapping the Landscape of ESG Strategies: A Bibliometric Review and Recommendations for Future Research. Sustainability, 15(24), 16592. https://doi.org/10.3390/su152416592 DOI: https://doi.org/10.3390/su152416592
Buchetti, B., Arduino, F. R., & De Vito, A. (2022). A systematic literature review on corporate governance and ESG research: Trends and future directions. Social Science Research Network. https://doi.org/10.2139/ssrn.4286866 DOI: https://doi.org/10.2139/ssrn.4286866
Cort, T., & Esty, D. (2020). ESG Standards: Looming Challenges and Pathways Forward. Organization & Environment, 33(4), 491-510. https://doi.org/10.1177/1086026620945342 DOI: https://doi.org/10.1177/1086026620945342
Daugaard, D. (2020), Emerging new themes in environmental, social and governance investing: a systematic literature review. Account Finance, 60: 1501-1530. https://doi.org/10.1111/acfi.12479 DOI: https://doi.org/10.1111/acfi.12479
Dong, B. (2023). A systematic review of the ESG strategy literature and future outlook. Frontiers in Sustainable Development, 3(4). https://doi.org/10.54691/fsd.v3i4.4784 DOI: https://doi.org/10.54691/fsd.v3i4.4784
Eccles, R. G., & Klimenko, S. (2019). The investor revolution. Harvard Business Review. Retrieved from https://hbr.org/2019/05/the-investor-revolution
Esposito De Falco, S., Montera, R., Leo, S., Laviola, F., Vito, P., Sardanelli, D., Basile, G., Nevi, G., & Alaia, R. (2024). Trends and patterns in ESG research: A bibliometric odyssey and research agenda. Corporate Social Responsibility and Environmental Management. https://doi.org/10.1002/csr.2744 DOI: https://doi.org/10.1002/csr.2744
Farzinnia, A., & Boon, C. (2024). An analytical approach to (meta)relational models theory, and its application to Triple Bottom Line (Profit, People, Planet) — Towards social relations portfolio management. arXiv preprint arXiv:2402.18764. Retrieved from https://arxiv.org/abs/2402.18764
Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman Publishing.
Friede, G., Busch, T., & Bassen, A. (2015). ESG and financial performance: Aggregated evidence from more than 2000 empirical studies. Journal of Sustainable Finance & Investment, 5(4), 210–233. https://doi.org/10.1080/20430795.2015.1118917 DOI: https://doi.org/10.1080/20430795.2015.1118917
Gallucci, C., Santulli, R., & Lagasio, V. (2022). The conceptualization of environmental, social and governance risks in portfolio studies: A systematic literature review. Socio-Economic Planning Sciences, 83, 101382. https://doi.org/10.1016/j.seps.2022.101382 DOI: https://doi.org/10.1016/j.seps.2022.101382
Grove, H., Clouse, M., & Xu, T. (2022). Identifying and discussing the challenges for boards to manage ESG measures. DOI: https://doi.org/10.22495/cbv18i1art1
Hai, W. (2024). Development and future trends of green finance from an ESG perspective. Frontiers in Business, Economics and Management. https://doi.org/10.54097/0hkacp17 DOI: https://doi.org/10.54097/0hkacp17
Hammond, P., & O'Brien, A. (2021). Pensions and ESG: An institutional and historical perspective. Social Science Research Network. https://doi.org/10.2139/ssrn.3936028 DOI: https://doi.org/10.2139/ssrn.3936028
Harrison, J., & Wicks, A. C. (2013). Stakeholder theory, value, and firm performance. Business Ethics Quarterly, 23(1), 97–124. https://doi.org/10.5840/beq20132314 DOI: https://doi.org/10.5840/beq20132314
Harrison, J., Wicks, A. C., Parmar, B. L., & de Colle, S. (2010). Stakeholder theory: The state of the art. The Academy of Management Annals, 4(1), 403–445. https://doi.org/10.1080/19416520.2010.495581 DOI: https://doi.org/10.5465/19416520.2010.495581
Jain, K. and Tripathi, P.S. (2023), "Mapping the environmental, social and governance literature: a bibliometric and content analysis", Journal of Strategy and Management, Vol. 16 No. 3, pp. 397-428. https://doi.org/10.1108/JSMA-05-2022-0092 DOI: https://doi.org/10.1108/JSMA-05-2022-0092
Jizi, M. I., & Nehme, R. (2024). Corporate social responsibility: Evolution through institutional and stakeholder perspectives. Journal of Corporate Social Responsibility and Environmental Management, 31(1), 1–16. https://doi.org/10.1002/csr.2269 DOI: https://doi.org/10.1002/csr.2269
Kotsantonis, S., & Serafeim, G. (2019). Four things no one will tell you about ESG data. Journal of Applied Corporate Finance, 31(2), 50–58. https://doi.org/10.1111/jacf.12329 DOI: https://doi.org/10.1111/jacf.12346
Lajili Jarjir, S., Chollet, P., & Cuzacq, N. (2013). New challenges of ESG issues.
Li, T., Wang, K., Sueyoshi, T., & Wang, D. D. (2021). ESG: Research progress and future prospects. Sustainability, 13(21), 11663. https://doi.org/10.3390/su132111663 DOI: https://doi.org/10.3390/su132111663
Lins, K. V., Servaes, H., & Tamayo, A. (2017). Social capital, trust, and firm performance: The value of corporate social responsibility during the financial crisis. The Journal of Finance, 72(4), 1785–1824. https://doi.org/10.1111/jofi.12505 DOI: https://doi.org/10.1111/jofi.12505
Mangla, K., & Yadav, N. (2024). Exploring sustainable investment frontiers: A bibliometric analysis on current trends and hurdles in incorporating ESG into investment decision-making. Journal of Informatics Education and Research, 4(3). https://doi.org/10.52783/jier.v4i3.1650 DOI: https://doi.org/10.52783/jier.v4i3.1650
Marie, M., Qi, B., Gerged, A. M., & Nobanee, H. (2024). Exploring Environmental, Social and Governance research in the wake of COVID-19: A bibliometric analysis of current trends and recommendations for future research. Corporate Social Responsibility and Environmental Management, 31(6), 6131–6149. https://doi.org/10.1002/csr.2909 DOI: https://doi.org/10.1002/csr.2909
Mellahi, K., & Wood, G. (2003). The resource-based view and competitive advantage: A critique. European Management Review, 1(2), 88–98. https://doi.org/10.1057/palgrave.emr.1500001 DOI: https://doi.org/10.1057/palgrave.emr.1500001
Mishra, S., & Modi, S. B. (2016). Positive and negative corporate social responsibility, corporate image, and firm performance: A mirror image or a two-faced concept?. Journal of the Academy of Marketing Science, 44(6), 779–795. https://doi.org/10.1007/s11747-016-0481-7
Nason, D., & Nandhakumar, J. (2021). The resource-based view, stakeholder capitalism, ESG, and firm performance: A systematic review and research agenda. Business Strategy and the Environment, 30(1), 1–22. https://doi.org/10.1002/bse.2967
Orlitzky, M., Schmidt, F. L., & Rynes, S. L. (2003). Corporate social and financial performance: A meta-analysis. Organization Studies, 24(3), 403–441. https://doi.org/10.1177/0170840603024003910 DOI: https://doi.org/10.1177/0170840603024003910
Pinney, C., Lawrence, S. and Lau, S. (2019), Sustainability and Capital Markets—Are We There Yet?. Journal of Applied Corporate Finance, 31: 86-91. https://doi.org/10.1111/jacf.12350 DOI: https://doi.org/10.1111/jacf.12350
Ritala, P., Albareda, L., & Puumalainen, K. (2021). The role of ESG in corporate innovation: A systematic review. Business Strategy and the Environment, 30(1), 1–22. https://doi.org/10.1002/bse.2967 DOI: https://doi.org/10.1002/bse.2967
Roselle, P. (2016), The Evolution of Integrating ESG Analysis into Wealth Management Decisions. Journal of Applied Corporate Finance, 28: 75-79. https://doi.org/10.1111/jacf.12178 DOI: https://doi.org/10.1111/jacf.12178
Shapsugova, M. (2023). ESG principles and social responsibility. E3S Web of Conferences, 420, 06040. https://doi.org/10.1051/e3sconf/202342006040 DOI: https://doi.org/10.1051/e3sconf/202342006040
Shen, H., Lin, H., Han, W., & Wu, H. (2023). ESG in China: A review of practice and research, and future research avenues. China Journal of Accounting Research, 16, 100325. https://doi.org/10.1016/j.cjar.2023.100325 DOI: https://doi.org/10.1016/j.cjar.2023.100325
Singh, A. K., Zhang, Y., & Anu. (2022). Responsible capital: The evolution and performance of ESG investing. Exploresearch. https://doi.org/10.62823/exre//01/03.10 DOI: https://doi.org/10.62823/ExRe//01/03.10
Sullivan, R., & Mackenzie, C. (2017). Responsible investment: Guide to ESG data providers and relevant trends. Journal of Environmental Investing, 8(1), 149–160. Retrieved from https://www.thejei.com/2017/05/01/responsible-investment-guide-to-esg-data-providers-and-relevant-trends/
Wan, G., Dawod, A. Y., Chanaim, S., & Ramasamy, S. S. (2023). Hotspots and trends of environmental, social and governance (ESG) research: A bibliometric analysis. Data Science and Management, 6, 100043. https://doi.org/10.1016/j.dsm.2023.03.001 DOI: https://doi.org/10.1016/j.dsm.2023.03.001
Whelan, T., Atz, U., & Gorman, B. (2020). ESG at a tipping point. McKinsey & Company. Retrieved from https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/esg-at-a-tipping-point
Wood, D. J. (1991). Corporate social performance revisited. The Academy of Management Review, 16(4), 691–718. https://doi.org/10.5465/amr.1991.4279003 DOI: https://doi.org/10.2307/258977
Zhang, N., & Wang, S. (2024). Research progress and prospect of environmental, social, and governance: A systematic literature review and bibliometric analysis. Journal of Cleaner Production, 141489. https://doi.org/10.1016/j.jclepro.2024.141489 DOI: https://doi.org/10.1016/j.jclepro.2024.141489
Zhukova, E. V. (2021). Key trends in ESG-agenda development: Reviewing the situation in Russia and the world. Vestnik of the Plekhanov Russian University of Economics, 6, 68–82. https://doi.org/10.21686/2413-2829-2021-6-68-82 DOI: https://doi.org/10.21686/2413-2829-2021-6-68-82
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Sadhana Ganesh Awate, Dr. Bharat Pralhad Kasar

This work is licensed under a Creative Commons Attribution 4.0 International License.
With the licence CC-BY, authors retain the copyright, allowing anyone to download, reuse, re-print, modify, distribute, and/or copy their contribution. The work must be properly attributed to its author.
It is not necessary to ask for further permission from the author or journal board.
This journal provides immediate open access to its content on the principle that making research freely available to the public supports a greater global exchange of knowledge.