ESG and Corporate Performance: A Survey

Abstract

Environment, social, and governance (ESG) is an increasing important topic that has attracted great attention in the fields of both academics and practitioners. By systematically reviewing the literature on ESG and corporate performance, this study primarily finds that a large number of researchers demonstrate positive relationship between ESG and corporate value, while some investigators indicate negative association. Furthermore, few researchers do not find significant evidence regarding this relationship. Aside from reviewing extant studies, this survey also displays the differences and connections of previous literature. The reasons why different investigators draw different conclusions may be due to different samples, research locus, proxies, methodology and research period. In particular, some researchers concentrate on ESG disclosure whereas others focus on ESG score or performance, which is inconsistent and can have different degrees of influence on corporate performance. Additionally, this literature review research paper uniquely integrates the effect of COVID-19 on the association between ESG and corporate performance. The majority of researchers indicated that the positive influence of ESG incline to be more highlighted during the COVID-19 crisis. However, an exceptional study concluded that ESG is not significantly related to corporate performance under the impact of COVID-19. As a consequence, not only does this survey complements the existing literature on ESG, but also it provides implications for practitioners and regulators.