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Article

Incorporating ESG Risk in Companies’ Business Models: State of Research and Energy Sector Case Studies

by
Magdalena Zioło
1,
Iwona Bąk
2 and
Anna Spoz
3,*
1
Faculty of Economics and Management, University of Szczecin, Mickiewicza 64, 71-101 Szczecin, Poland
2
Faculty of Economics, West Pomeranian University of Technology, Janickiego 31, 71-270 Szczecin, Poland
3
Institute of Economics and Finance, The John Paul II Catholic University of Lublin, Aleje Racławickie 14, 20-950 Lublin, Poland
*
Author to whom correspondence should be addressed.
Energies 2023, 16(4), 1809; https://doi.org/10.3390/en16041809
Submission received: 5 January 2023 / Revised: 1 February 2023 / Accepted: 8 February 2023 / Published: 11 February 2023
(This article belongs to the Section C: Energy Economics and Policy)
Browse Figures
Versions Notes

Abstract

:
The article aims to systematize the state of knowledge of and research on the inclusion of ESG (Environmental, Social, and Governance) risk in companies’ business models, with a special stress on energy sector companies. Many publications address incorporating ESG, but only some deal with it from the perspective of business models. This paper fills that gap. The methods of incorporating ESG risk into a sustainable business model, identified on the basis of the literature review, were verified based on the examples of three companies from the energy industry. A two-stage review of publications from the WoS and Scopus databases was carried out, considering a more comprehensive (sustainability) and a narrower (ESG risk) range of keywords, and the period from 2000 to 2022. The result showed that SMEs and large enterprises consider ESG risk in their risk management systems (ERMs), while small enterprises and start-ups do not. In Europe, Asia, and Australia, it is common to include ESG risk in an ERM, while it is rare in Latin America. In developing countries, companies in the service sector are more likely to include ESG risk in ERMs than those in the manufacturing sector. These findings may be useful for policymakers who wish to provide support and financial incentives for companies transforming their business models toward sustainability.

Graphical Abstract

1. Introduction

ESG risk is currently one of the leading risks in terms of its impact and probability of occurrence. Its effect is felt in almost every enterprise; hence, rulers and business managers take several measures to reduce this risk. Practical actions to reduce ESG (Environmental, Social, Governance) risk are necessary because the link between ESG risk and financial performance has been documented [1]. However, it is worth noting that the impact of ESG on financial performance might also be negative, although very few studies have found a negative correlation [2].
Mitigating the impact of ESG risk on companies because of its financial and non-financial consequences is an essential part not only of the actions taken by companies themselves, but also of those taken by financial markets, governments, and regulators [3].
The impact of mitigating the ESG risk for companies also means a positive impact on environmental and social sustainability. It is crucial in a global context and to ensure sustainability. The incorporation of ESG risk into companies’ planning implies the transition of companies to corporate sustainability and to reducing the ESG risk, which is critical in the context of strategic action, for example, the European Green Deal or Taxonomy.
Integrating ESG into companies’ business models means an ESG risk reduction for the businesses and increasing opportunities for business development, especially with the support of external funding (some financial institutions exclude dirty companies from cooperation and limit access to financing).
There are different motives for why companies integrate ESG risk into business models. Some are related to regulatory frameworks or financial markets, and to institutions’ requirements [3]. Some have other aims, such as to reduce the exposure to ESG risk or stakeholders’ expectations [4].
Studies of, analyses of, and research on incorporating ESG risk into companies’ business models are critical for supporting businesses, governments, and financial institutions throughout the transition process toward corporate sustainability. In particular, there is a recognized research gap in the area of integrating ESG risk into companies’ plans because few studies deal with incorporating ESG in business models [5].
The motives for incorporating ESG risk and how companies accomplish this are the subjects of intensive research [6]. There are many research streams in the area of the integration of ESG risk by companies. The major ones are related to risk management [7], the decision-making process [8,9], ESG scoring and rating [9], responsibility [10], and business models [5].
The research on the incorporation ESG risk by companies is justified to ensure sustainability in the global context. Companies are the critical driver of sustainability and are responsible for negative externalities. Therefore, the knowledge of how to mitigate negative externalities throughout the companies’ transitions to corporate sustainability is necessary. One possible action is to adjust companies’ business models toward sustainability by incorporating ESG considerations.
However, the scope of the research and the significant number of works makes it difficult to comprehensively analyse the results and determine the actual state of knowledge. In particular, this concerns the systematization of the state of research in the context of the size of the surveyed enterprises and their locations, the area of the research, and the methodology.
Thus, this paper aims to systematically review the literature and examine how companies incorporate ESG considerations into their business models, which is the current knowledge gap addressed by the article. In particular, the article focuses on the search for the relationships between the size of the company and its geographical location and the method of ESG risk management that it has adopted, as well as the research methodology used by the researchers.
The purpose of the paper is to fill a research gap regarding the state of the research on ESG risk in companies’ business models. A systematic literature review with elements of statistical analysis was used to achieve this objective. It was possible to carry out the research by identifying relevant variables that give information about how companies take ESG risks into account. For this purpose, the Academic Database of Elsevier Scopus and the Web of Science database were used. After eliminating duplicate titles and analysing the content of each publication, the sample was reduced to 52 references describing how to incorporate ESG risk into the business models of enterprises.
The approach used by the authors differs from previous research practices, which mainly focus on the use of qualitative methods. The authors also included in their systematic literature review selected methods of statistical analysis, i.e., dependency analysis based on multivariate tables and multivariate correspondence analysis. The use of these methods made it possible to determine the strength of the relationship among the qualitative variables studied and to search for relationships among selected keywords describing ways for companies to create sustainable value. This resulted in the identification of groups of scientific articles that were similar in terms of the issues they analysed.
The main research questions were as follows:
  • What are the primary research trends in the field of ESG risk for companies?
  • How do small, medium, and large enterprises manage ESG risk?
  • Does the area of research depend on the location, and, if so, how?
  • What is the relationship between ESG risks in enterprises in developed and developing countries?
  • How do companies in different sectors manage ESG risk?
  • What research methodology is used to study companies’ ESG risk?
The paper is organized as follows: The introduction is Section 1; Section 2 contains a literature review. Section 3 presents the methodological approach, the data collection procedure, the description of the methods, and the research results. Section 4 discusses the research results, and Section 5 is the conclusion.

2. Literature Review—ESG Risk in Companies

The concept of risk is related to uncertainty [11], or to the nonexistence of absolute certainty [12], which can have positive or negative impact on the organization [13]. Risk is an inseparable element of business. In the literature, there are several classifications of the risks to which enterprises are exposed. According to the Casualty Actuarial Society, companies are exposed to financial risk, hazard risk, operational risk, and strategic risk [14,15]. Leo et al. [16], creating a taxonomy of the risks to which banks are exposed, divided the risks into two main categories, i.e., financial risk, under which he distinguished credit risk, market risk, principal risk, liquidity risk, and non-financial risk, which included country risk, compliance risk, conduct risk, legal risk, model risk, business and strategy risk, reputation risk, strategic risk, and operational risk. A similar approach was presented by Boultwood [17], who distinguished financial (quantitative) risk and non-financial (qualitative) risk, where the latter included business risk, reputation risk, operational risk, strategic risk, and ESG risk. The Cambridge Taxonomy of Business Risks includes the following classes of risk: financial risk, geopolitical risk, technology risk, environmental risk, social risk, and governance risk. Each of these main classes includes several families of risks, and a family of risks may contain many types of risk [18].
The growing impact of non-financial factors on the activities of business entities means that ESG risk is increasingly identified as part of the risks to which enterprises are exposed. In the literature on the subject, the term ESG risk most often refers to environmental, social, and governance conditions or events [19]. Some authors identify ESG risk with the concept of sustainability risk [20], which some authors relate to environmental and social issues, while governance risk issues are included in social risk [21,22].
Among the factors that determine environmental risk, the following are most frequently indicated: climate change, environmental pollution (air, water, land), environmental degradation, and resource scarcity [23]. The Task Force on Climate-related Disclosure (TFCD) [24] distinguished two classes of this type of risk: physical risk and transition risk. In scientific research, environmental risk is analysed in the context of risk management [25,26], its relationship with companies’ financial performance [27,28], the cost of capital [29], the ability to repay debts and the probability of default [30], and financial stability [31].
Social risk is a broad concept and has the potential to grow the fastest. These risks include human rights, equality, social cohesion, social inclusion, consumer rights, health, safety, and security. Social risk is analysed in the context of labour market instability, the social relations of communities, political transformations [32], the fair treatment of employees [33], management [34], and financial stability [31].
Governance risk arises from management structures, employee relations, relevant staff remuneration, tax, and legal compliance [20]. In scientific research, governance risk appears in the context of the prevention of corruption and bribery, transparency [35], risk management [36], and the impact of the management staff on the risks taken by a company [37].
The growing importance of ESG risk in enterprise operations causes this risk to be more and more often included in the enterprise risk management system (ERM). Non-financial risk management could be a way to link company development with the concept of sustainability [38]. Wijethilake and Lama [39], Bui and de Villiers [40], and Aziz et al. [41], in a separate study, showed that a proactive approach to the concept of sustainability helps companies to implement effective sustainable risk management. Non-financial risk management may contribute to a competitive advantage [42,43], increase the company’s value [44], and translate into the reduction of the negative effects of unsustainable practices, such as penalties and noncompliance [45,46,47].
The emergence of the concept and implementation of Enterprise Risk Management (ERM) is the response of enterprises to the changes brought about by globalization and the pressure from regulators to manage risk holistically [48]. By focusing on managing and mitigating global risk, companies can avoid excessive costs of risk management [49,50]. The risk management process is also a way to reduce the complexity of enterprise risks and has the benefits of ease of use and transparency. Identifying risks and expressing their value in numbers facilitates the risk monitoring and management processes. In the process of implementing a risk management system in an enterprise, an initial phase and four main phases can be distinguished. The initial phase consists of a contextual analysis during which risk management goals are defined, consistent with the company’s strategic goals, and the resources owned by the organization and needed in the risk management process. The main phases are risk identification, risk estimation, risk evaluation (defining procedures in terms of the occurrence and effects of acceptable risk and unacceptable risk), and risk control planning and implementation [51]. The last stage of the risk management process is communication and consultation with stakeholders about the occurring risks and the risk management process [52]. The method of implementing ERM in an enterprise is individual for each entity because each entity adjusts the system parameters to its own functionality [53].
Gardiner and Endicott [54] suggested the integration of sustainability risk management (SRM) in ERM as a critical part. SRM is a process that addresses and manages a wide spectrum of new and unknown risks derived from sustainability issues, and the goal of this process is to achieve sustainable value for long-term survival. Due to the complexity of the risks to which businesses are exposed, SRM should be encompassed within the ERM framework [42]. Sustainability Risk Management is becoming a corporate strategy [55], which ensures the survival and development of the company while maintaining sensitivity to environmental, social, and management issues.
Deloitte proposed the Sustainability Risk Management Framework [56]. The framework encompasses corporate strategy, including value drivers, value chain, risk exposure, response design, outcome, and performance. Additionally, appropriate responses must be designed and implemented to achieve results that maximize value for a company and its stakeholders. The role of the directors is to supervise how their companies’ risk management strategies and practices comply with the ESG requirements of a wide range of stakeholders. Wijethilake and Lama [39], based on a survey of senior management in both local and multinational organizations in Sri Lanka, showed that the participation of senior management positively affects the process of integrating sustainability into core values and sustainability risk management. The results obtained are in line with the results of the study by Aziz et al. [41], who showed that top management leadership is crucial to successful management of sustainability risk. Wijethilake and Lama [39] also showed that the pressure of stakeholders (shareholders, customers, government and regulatory bodies, suppliers, employees, and competitors) does not affect the process of sustainability risk management, which is in line with the views of Jolland et al. [57]. In the opinion of Horisch et al. [58], incorporating ESG issues into the company’s core business creates real value for stakeholders.
Managing relationships and building trust and transparency are key to gaining approval and support from key stakeholders of the company [56]. Supply chain management (SCM) is perceived as a key factor in improving business effectiveness and success [59]. Sustainable supply chain management (SSCM) becomes a strategic requirement for companies [60], as it is an important source of cost reduction and increases the long-term profitability of the organization [61].
To the best of the authors’ knowledge, there are no similar studies in the literature. So far, articles aimed at systematizing the state of knowledge related to ESG have focused on the following areas: ESG literature reviews and prospects for future research [62,63], ESG performance in the context of multinational business research [64,65], ESG disclosure and firm performance [66], ESG and Socially Responsible Investment [67,68,69], and ESG and CSR [70].

3. Data and Methodology

The amount of work related to ESG risk in enterprises is impressive. The Web of Science (WoS) database contains thousands of papers related to this issue (Table 1).
Given the purpose of the article, the focus was on publications that concern the integration of sustainable development risk into the business models of companies. The review of the literature available in the Web of Science (WoS) database shows, that in the years 2000–2022, 2244 publications were indexed that, in the title, abstract, or keywords, referred to terms related to the researched topic and included the following combinations of keywords: sustainability risk* AND sustainab* AND business OR ESG* AND ESG* OR integrating*. These are mainly papers by authors from China (554 works), the USA (500), Germany (162), India (124), Japan (118), Spain (112), and the United Kingdom (103). They were published primarily by such publishers as Elsevier (459 papers), IEEE (362), Spie-Int Soc Optical Engineering (263), Springer Nature (220), and Wiley (89).
In the years 2000–2022, the number of publications on the topic investigated showed an upward trend, with slight decreases in some periods (Figure 1). In 2000, only 20 publications were indexed in the WoS database, while, 15 years later, their number exceeded 150. In the following years, slight decreases were noted, but the number never dropped below 110. With the increase in the number of publications, the number of their citations also increased, from 304 in 2000 to 5584 in 2021, with 27% more a year later.
Figure 2 shows a map of the links between keywords indicated in publications that also refer to the ESG risk for enterprises. The network of connections between the two main entries and other terms accompanying them is relatively dense. Four Five clusters containing the following keywords can be extracted:
  • Corporate, corporate governance, determinants, ESG performance, impact, management, responsibility, sustainability reporting;
  • Corporate social responsibility, ESG investing, investors, risk, socially responsible investment;
  • Sustainable finance;
  • Companies, corporate social response, corporate sustainability, reputation, social responsibility, sustainability, firm value;
  • Corporate sustainability, environmental, firms, social, social and governance (ESG).
The second stage of the research was a narrowed review of the literature on the subject to identify ways to incorporate ESG risk into the business models of companies. For this purpose, the Academic Database of Elsevier Scopus was used. The titles, abstracts, and keyword of publications were searched using the following word strings: “sustainability risk” AND sustainab* AND business; “ESG risk” AND sustainab* AND integrat*; “sustainability risk” AND sustainab* AND business AND incorporat*; “sustainability risk” AND sustainab* AND enterpris*. A total of 130 publications were found, and the research sample obtained from the Scopus database as a result of the applied search criteria is presented in Table 2.
After eliminating duplicate titles and analysing the contents of the publications, the sample was reduced to 52 references. The final sample consists of publications describing how to incorporate ESG risk into the business models of enterprises. The characteristics of the research sample are included in the Table 3.
The selected categories from Table 3 are presented graphically in Figure 3.
Looking at the share of the continents, it is clear that cases from Asia and Australia are the most frequently described by researchers. At the same time, the shares of developed and developing countries are very similar. The authors most often present cases of large enterprises (they are described twice as often as enterprises from the SMEs sector). This can be explained by the fact that it is mainly large companies that consider ESG risk in their activities, as they have the appropriate resources or are required to have a risk management system.
Based on the analysis of the content of the publications from the research sample, the following ways of incorporating ESG risk in business models were distinguished:
  • ESG risk management (38 publication);
  • ESG risk in decision-making/investment processes (19 publications);
  • Sustainable (green) supply chain (16 publications);
  • ESG risk in business model (16 publications);
  • Risk culture (8 publications);
  • Communication with stakeholders (4 publications).
The methods specified were compared with the data from the individual categories presented in Table 3.
Based on the information from the analysed publications, 18 binary variables were constructed, having two categories of “yes” and “no,” which were assigned ranks of 1 and 0, respectively:
  • X1—Publication Year (1 if the paper was published later than 2018; 0 in other cases);
  • X2—Europe (1 if European companies were analysed; 0 in other cases);
  • X3—North America (1 if North American companies were analysed; 0 in other cases);
  • X4—Asia and Australia (1 if Asian and Australian companies were analysed; 0 in other cases);
  • X5—Developing countries (1 if companies from Developing Countries were analysed; 0 in other cases);
  • X6—Developed Countries (1 if companies from Developed Countries were analysed; 0 in other cases);
  • X7—SME sector (1 if companies from SME sectors were analysed; 0 in other cases);
  • X8—Large Enterprise (1 if companies of the Large Enterprise sector were analysed; 0 in other cases);
  • X9—Manufacturing/Production/Industry (1 if companies from the Manufacturing/Production/Industry were analysed; 0 in other cases);
  • X10—Service sector (1 if companies from the Service sector were analysed; 0 in other cases);
  • X11—Sustainable Supply Chain Risk Management (1 if companies from Sustainable Supply Chain Risk Management were analysed; 0 in other cases);
  • X12—Including ESG Risk In Enterprise Risk Management (1 if companies from Including ESG Risk In Enterprise Risk Management were analysed; 0 in other cases);
  • X13—Including ESG Risk In Decision Making (1 if companies from Including ESG Risk In Decision Making were analysed; 0 in other cases);
  • X14—Sustainable Business Strategy (1 if companies from Sustainable Business Strategy were analysed; 0 in other cases);
  • X15—Sustainable (Green) Supply Chain (1 if companies from Sustainable (Green) Supply Chain were analysed; 0, in other cases);
  • X16—ESG Risk Management (1 if companies from ESG Risk Management were analysed; 0 in other cases);
  • X17—ESG Risk in Decision Making/Investment (1 if companies from ESG Risk In Decision Making/Investment were analysed; 0, in other cases);
  • X18—ESG Risk in Business Model (1 if companies from ESG Risk in Decision Making/Investment were analysed; 0 in other cases).
In the next step, cross-tabulation was carried out, based on which statistics were calculated to determine the strength of the association between the two qualitative (unmeasured) variables under study. The Q-Yulea contingency (association) coefficient [71,72], which is applied when the data are presented as a 2 × 2 contingency table, was used,. The value of this coefficient belongs to the interval [–1,1]. Its sign does not indicate the direction of the relationship, since the value depends on the design of the array. The closer the absolute value is to unity, the stronger the relationship between the features.
During the next stage, groups of articles with similar views on how companies integrate ESG risks into their business models were identified. For this purpose, correspondence analysis, which belongs to the group of multivariate methods for studying interdependence, was used. It is widely discussed and used in socio-economic research [73,74,75].

4. Results and Discussion

Analyzing the methods of incorporating ESG risk into business models used by enterprises of various sizes, it can be seen that, regardless of size, companies most often use risk management (Table 4). The second place was taken by including ESG risk in decision-making and investment processes. When it comes to start-ups, each of the above-mentioned practices covers 50% of all of the companies in this category.
When analysing the relationship between the locations of the companies and their methods of incorporating ESG risk into their business model, ESG risk management is again the most frequently implemented, regardless of the region where the companies are located (Table 5). Also, the second position is the same as in the previous comparison (ESG risk in decision making/investment).
Another category in which ESG risk management and the inclusion of ESG risk in decision-making and investment processes are the most popular types of business activity is shown in Table 6. Manufacturing enterprises implement these practices first, as well as enterprises providing services. However, in the case of service companies, the advantage of using the first two methods is particularly clear, while manufacturing companies care about ensuring a green supply chain (18%) almost as often as they consider ESG risk in their decision-making and investment processes (20%).
The analysis of the relationship between the ESG risk management methods implemented and the level of development of the countries of origin of the companies showed slightly different results (Table 7). ESG risk management is again most often implemented by companies from developing countries, but a sustainable supply chain is in the second place, ahead of including ESG risk in decision-making and investment processes. Companies from developed countries had as their first-place strategy the incorporation of ESG risk management in decision-making and investment processes, while just behind this practice are ex aequo a sustainable supply chain and incorporating ESG risk into the business model (21% each). ESG risk management is not far behind them, with 18% of the share. The results show that there is a clear difference in the implementation of ESG risk management methods depending on the level of development of the companies’ countries of origin.
The next step in our research was a more detailed analysis of ESG risk management, which turned out to be the most popular way of integrating risk management into enterprises’ business models and strategies. ESG risk management includes three activities distinguished by our analysis of the research sample, namely the following:
  • Including ESG risk in Enterprise Risk Management;
  • Risk identification;
  • Risk monitoring;
  • Risk mitigation.
The analysis shows that large enterprises include risk identification and risk monitoring in their ESG risk management systems more often than risk mitigation, while companies in the SME sector focus primarily on risk mitigation (Table 8).
Risk identification is a most common activity regardless of a company’s location. Only in the case of companies from North America and Africa is risk mitigation as popular as identification. In Europe and Latin America, the second place is shared by risk monitoring and risk mitigation, while, in Asia, risk monitoring is only slightly less popular than risk identification.
The share of each activity in the management of ESG risk by manufacturing companies is the same as that for large companies. This indicates that the large companies are also manufacturing companies. For half of the service companies, risk identification is the main activity in the area of risk management, but risk monitoring is not far behind, with 40%.
Taking into account the level of development of the country of origin of the company, there are no significant differences in risk management practices. Among companies from both developing and developed countries, the most popular are risk identification and monitoring. Each of these activities is undertaken by 40% of the companies from developing countries and by 38% of the companies from developed countries.
Table 9, Table 10, Table 11, Table 12, Table 13, Table 14, Table 15 and Table 16 present cross-tabulation tables between variables for which there was a clear relationship, including the values of the Q-Yulea contingency coefficient in parentheses. As shown in Table 9, most of the publications related to sustainable business strategies were written before 2020, and 40% of them were related to developing countries (Table 10). In the case of developed countries, a clear association (coefficient of coincidence of 0.323) was identified with the variable of ESG risk consideration in decision making (Table 11). In developed countries, about 29% of the publications are related to sustainable business strategies (Table 12). For the developing countries, there is a clear relationship with the variable “Developing Countries and ESG Risk in Decision Making/Investment” (Table 13). More than 21% of large companies use a sustainable business strategy, and the relationship between these variables is statistically significant (Table 14). More than 30% of the publications emphasize considering risk in business models in manufacturing firms (Table 15) and in-service companies, and about 60% of the publications focus on including ESG risk in enterprise risk management (Table 16).
The use of correspondence analysis allowed for the separation of groups of articles describing similar approaches by enterprises to the integration of ESG risk into their business models. Three groups of publications have been identified:
  • Group I includes sixteen articles related to sustainable supply chain risk management and sustainable (green) supply chains;
  • Group II refers to articles on developing and developed countries in Europe, North America, Asia, and Australia. They address the following issues: the consideration of ESG risks in decision-making, sustainable (green) supply chains, and ESG risks in decision-making/investment;
  • Group III includes mainly papers published in 2020 or later that address the following issues: ESG risk in enterprise risk management, sustainable business strategies, ESG risk management, and ESG risk in a business model.
Enterprises can incorporate ESG risk in several ways. The methods of incorporating ESG risk into business models described in the publications analysed are presented as graphic symbols in Table 17.
The methods of incorporating ESG risk into a sustainable business model, identified on the basis of the literature review, were verified on the basis of the examples of selected companies from the energy industry, i.e., RWE, Enel S.p.A., and Neste.
RWE is a leading European energy company. Its business activities are focused on the production of electricity. Initially, RWE was perceived as an operator of nuclear power plants and lignite mines. However, for several years, the company has been consistently phasing out nuclear and coal energy, basing its portfolio on offshore and onshore wind energy, solar, hydro, hydrogen energy, energy storage, and also biomass and gas. RWE plans to become climate neutral (including the entire value chain) by 2040. The way to achieve this goal is ‘green growth’. By 2030, RWE wants to double the energy generation capacities of its wind energy, photovoltaics, and storage technologies, while increasing its flexible backup power plants and electrolysers for hydrogen production. The company decreased its CO2 emissions by more than 55% in years 2012–2021. It supports a secure energy supply with a flexible fleet of power plants and is working on sustainable storage technologies.
The concept of sustainability has been incorporated into the company’s strategy and business model. The company declares its involvement in climate protection activities. To this end, it not only reduces greenhouse gas emissions, but also takes measures to protect biodiversity in the locations where it operates. This applies in particular to the reclamation of mining areas and the construction, operation, and decommissioning of wind farms. RWE strives to reduce the consumption of natural resources and increase the recycling rate. It is also committed to upholding high social standards and promoting a diverse corporate culture. This diversity has many aspects. One of them is gender equality for leadership roles. In RWE, in 2021, women held 19% of managerial positions, but the company’s goal is to increase this share to 30% by 2030. The company makes an effort to increase the motivation and commitment of employees to work. It also cares for occupational health and safety by minimizing the risk of possible fatal accidents at work. RWE implements attractive and innovative solutions for its clients and business partners.
RWE has implemented an ERM system. Non-financial risk has been incorporated into the company’s risk management system in a way that includes environment (climate: extreme weather events), employee (fatal occupational accidents), and social aspects (negative public perception—as not a “green company”), human rights (negative impact on human rights in the supply chain), and anticorruption (occurrence of cases of corruption). The purpose of risk management at RWE is identifying, assessing, and managing risks at the earliest possible stage. Potential risks that could arise from the business activities of RWE or from its business relationships were identified. The level of risk (low, medium, and high) was determined in the context of its influence on RWE or one of its parts, and its relevance for stakeholders. In the case of the influence on an individual part of RWE, the highest risk level is assigned to fatal occupational accidents. Considering the influence on the whole company, the environmental risk is the highest, and, in the context of relevance for stakeholders, the most important risks are fatal occupational accidents and negative public perception (as “not a green company”). The latter risk can translate into a loss of reputation and a reduction or lack of investment in the company. Therefore, before establishing cooperation, the company becomes acquainted with all potential business partners (suppliers). Current business partners are also subject to the control process. The company’s goal is to create sustainable value throughout the supply chain. In the case of renewable energy sources (i.e., wind, solar, and hydro energy), the issue of the green supply chain ceases to matter, as renewable energy sources do not need to be supplied.
Enel S.p.A. is an Italian multinational manufacturer and distributor of electricity and gas. It was at first established as a public body in 1962, and then transformed into a limited company in 1992. Finally, it was privatized in 1999. The strategy of the company is to base its development on sustainability, as a key and essential element in the transition to a decarbonized economy.
The company pays great attention to the needs of stakeholders, trying to anticipate these needs and priorities in advance. This approach results from the awareness that the company’s activities impact the ecosystem it is a part of, and that achieving long-term sustainability requires people to consider the environment, the climate, the economy, and society as inseparable parts of the whole.
The company developed a sustainability plan for 2022–2024 based on six interrelated macro-areas that indicate strategic lines of action. The plan consists of the following objectives: to bring forward the Net-Zero objectives to 2040 (Net-Zero Ambition); to enable electrification for customers and to answer their energy demand by offering a reliable and sustainable service (Electrification), to create long-term value for all stakeholders, helping them to grow and meet challenges (People), to promote the protection of natural capital and biodiversity (Nature), to accelerate sustainable progress through innovation, digitalization, and the circular economy (Growth accelerators), and to support the governance, respect and promotion of human rights, and continuous improvement in health and safety objectives (Backbones). Enel incorporated ESG factors into its business model and decision-making process. The company developed a method of analysing ESG factors and assessing their importance in terms of sustainable development based on the guidelines set out in international standards (including the Global Reporting Initiative—GRI, the UN Global Compact, the SDG Compass, etc.).
Enel has implemented an ERM system. This system includes a set of rules, procedures, and organizational structures designed to identify, measure, monitor, and manage key risks. As part of the risk management system, the Group Risk Committee and Local Risks Committees were established, a risk appetite framework was defined, and three lines of defence (management, control, and internal audit) and a reporting system were designated. The risks to which the company is exposed are defined in the risk catalogue and then mapped to facilitate their identification and the assessment of their impact on the company. In 2021, the company identified six risk categories. In each of the risk categories listed below, you can find non-financial risk. The risk categories identified cover the following types of risk:
  • Strategic risk—strategic planning and capital allocation, macroeconomic and geopolitical trends, legislative and regulatory developments, innovation, competitive environment, and climate change (risk associated with delayed or inadequate strategic and operational initiatives for climate change adaptation and mitigation);
  • Governance and culture risk—corporate culture and ethics (risk associated with the inadequate integration of the group’s principles of ethics, diversity, and equal opportunities in corporate processes and activities), corporate governance (risk associated with ineffective corporate governance rules and/or a lack of integrity and transparency in decision-making processes), reputation (risk of adversely impacting the public image of the group and prejudicing the relationship of trust with shareholders), stakeholders (risk of ineffective engagement with the main stakeholders in Enel’s strategic positioning in terms of sustainability and financial objectives, with potential adverse effects on its reputation and competitiveness);
  • Digital technology risk—IT effectiveness, cyber security, digitalization, and service continuity;
  • Financial risk—appropriate capital structure and access to financing, interest rate, commodity, currency, credit and counterparty, and liquidity;
  • Operational risk—asset protection, business interruption, customer needs and satisfaction (risk associated with the failure to fully satisfy customer expectations and needs in terms of quality, accessibility, sustainability, and innovation), environment (risk of significant impacts on the quality of the environment and on the ecosystems involved following a violation of environmental regulations), health and safety (risk of potential impacts on the health and safety of employees and other parties following a violation of health and safety regulations), intellectual property, people and organization, process efficiency, procurement, logistics and supply chain, and service quality management(risk associated with the inability of third-party suppliers of internal services to meet the agreed service standards);
  • Compliance risk—accounting compliance, antitrust and consumer rights compliance, corruption (risk of adverse impacts associated with wilful misconduct or corruption by persons within or outside the group in order to obtain an unfair or illegal advantage), personal data protection, external disclosure, compliance with financial regulations, compliance with tax regulations, and compliance with other laws and regulations.
ERM makes it possible to define a strategy for each risk while maintaining an integrated approach, to create and update measures, risk measurement models, and risk limits, and to define appropriate management and control arrangements. The company is also building a sustainable supply chain. In addition to maintaining the appropriate quality of delivery, the supplier is obliged to adopt the best practices in terms of human rights and working conditions, workplace health and safety, and environmental responsibility.
Neste is a Finnish company that has been operating since 1948 and was founded to secure the supply of crude oil in Finland. Today, it is the world’s leading producer of sustainable aviation fuel, renewable diesel, and renewable feedstock solutions for various polymers and chemicals industry uses. Neste has integrated sustainability into its business strategy as the key to the long-term success of its business. The company’s sustainability vision is an integral part of its transformation towards a carbon neutral and nature positive value chain. Neste aims to achieve aspirational goals for biodiversity, human rights, supply chain, and raw materials.
Neste considers risk management an integral part of good management practice and an essential component of good corporate governance. Identification and risk management allow Neste to run its business and achieve its goals in a constantly changing environment. The framework and principles for risk management have been defined in the Neste Corporate Risk Management policy and are aligned with the COSO: Enterprise Risk Management: Integrating with Strategy and Performance and ISO 31000:2009 Standard. The defined rules and procedures also apply to the sustainability risk. Sustainability risk is identified and assessed twice a year to determine its impact on the company’s financial results, reputation, and achievement of strategic goals. As part of its sustainability risk, Neste identified climate-related risks and opportunities, the risk of negative environmental impacts from emissions to air and water, the risk of leaks, explosions and other chemical hazards, the risk of adverse environmental impact from procurement of raw materials for refining, the risk of adverse human rights impacts, and the risk of corruption and bribery.
The company also focuses on social issues. It respects equality and nondiscrimination and always provides career and development opportunities to employees who are most qualified, without allowing any personal attributes such as gender, ethnic background, nationality, age, pregnancy, sexual orientation or gender identity, disability, religion, or political opinions to influence the decision making. The company is also attentive to issues related to the human rights. This risk is identified not only at the enterprise level but also in its supply chain. In 2021, the company conducted a human rights audit among its suppliers to prevent, mitigate, and, where necessary, remediate adverse human rights impacts. Such audits will become an annual practice at Neste, enabling the better management of risks to human rights in all of its business activities. To ensure the sustainability of its supply chains, Neste identifies and selects appropriate partners. Ensuring the sustainability of the supply chains begins before closing the deal or accepting the delivery of materials, products, components, or services. All business partners and suppliers are expected to uphold Neste’s sustainability policies and principles, including their Supplier Code of Conduct, a key element in Neste’s supplier management system. As part of expanding awareness and sensitivity to sustainability issues among suppliers, Neste conducts sustainability workshops to create the opportunity to discuss sustainability-related matters.
The way of integrating sustainability risk in the above-described companies is presented in Table 18.
All of the companies presented that integrated sustainability risk into their business models undertook a similar set of actions, but the importance of the individual actions was different. The activities of companies in the energy sector towards sustainability are undoubtedly stimulated by pressure from stakeholders. The legal regulations implemented in the area of sustainability are also of great importance.

5. Conclusions

The article summarizes the state of the research on ESG risk in enterprises. The incorporation of ESG considerations by companies is essential to the research area. There are many publications in this field. However, only some deal with the topic from the perspective of business models, so this paper fills that gap. In particular, the paper fills the research gap in terms of reviewing the literature, listing the results, and diagnosing the main research trends and methodologies.
The main purpose of the paper is to systematically review the literature and examine how companies incorporate ESG into their business models. The business model perspective is the original contribution of the study. The paper reaches the goal, and, according to the main findings, the way that companies incorporate ESG into their business models is determined by each company’s sector, size, and geographical location.
The main object of the study was to show the existing state of knowledge in the area of incorporating ESG considerations into companies’ business models. The detailed objectives were related to the analysis of how the researchers conduct such studies (methodology perspective) and what are the main ways in which companies adjust to corporate sustainability according to the companies’ sizes, locations, and sectors. The study reached all of the objectives and formulated implications for stakeholders. Policymakers need to know how companies react to ESG and transform their business models toward sustainability. Based on this knowledge, the support and financial incentives system adjusted towards ESG are worth reconsidering. Financial institutions also benefit from learning about companies’ sustainable business models in the contexts of financial services and products and ESG scoring and rating. Finally, companies use knowledge to further the adaptation process toward corporate sustainability.
It was established that, broadly, the leading research concerned the spheres of corporate governance, corporate sustainability, ESG and sustainable finance, and the narrow approach covered the trends of ESG risk, risk culture, and green supply chains. The study’s methodology was dominated by a system based on qualitative methods such as case studies and literature reviews.
Our research stated that, during the 22 years covered by the analysis, 2244 articles on sustainability and sustainability risk in enterprises were produced, and the narrowly outlined research on ESG risk showed 130 publications in this area.
The application of statistical methods made it possible to determine the relationship between the variables from the Academic Database of Elsevier Scopus and the Web of Science database. For example, a clear relationship was identified between publications on developed countries and a variable that includes ESG risks in decision making. On the other hand, publications on developing countries show a clear relationship with the variable “Developing Countries and ESG Risk in Decision Making/Investment”. Thanks to the multidimensional correspondence analysis, it was possible to identify groups of scientific articles that were similar in terms of the issues they analyzed.
As a result of these analyses, it was diagnosed that SMEs and large enterprises take ESG risk into account at every level in their risk management systems, that is, identification, monitoring, and mitigation. Small enterprises and start-ups do not include ESG risk in their risk management systems.
In Europe, Asia, and Australia, the most common practice is to have ESG risk in the risk management system at all levels; the companies from Latin America are the least likely to do so. In developing countries, companies in the service sector are more likely to include ESG risk than in the manufacturing, production, and industry sector.
As a result, the research questions were positively answered, showing differences in the behaviour of companies with respect to ESG risk depending on their size, location, and type. The conducted research is comprehensive and generalizing.
Future work will involve a detailed study of companies from selected industries and locations. We especially intend to study the incorporation of ESG factors into the business models of mining industry companies, as they are one of the more challenging sectors in the ESG transition and a sector which is one of the most exposed to ESG risks. The role of policymakers and financial institutions in supporting the mining industry in its ESG transition and incorporation of ESG factors is also a part of the planned study. It will be helpful to have further research on sustainable behaviour spreading to the so-called dirty sectors. The most significant limitation of the study is the availability of quantitative databases comparable to those in the study. Also, the extended scope of the literature in the field creates a risk of missing some literature, but we did our best to analyse the state of knowledge in the best possible way. As a result, the findings and assumptions are limited to the scope of the available data. Finally, the generalisability of research results might be limited.

Author Contributions

Conceptualization, M.Z., I.B. and A.S.; methodology, I.B.; software, I.B.; validation I.B.; formal analysis, M.Z., I.B. and A.S.; investigation, M.Z., I.B. and A.S.; resources, M.Z., I.B. and A.S.; writing—original draft preparation, M.Z., I.B. and A.S.; writing—review and editing, M.Z., I.B. and A.S.; visualization, M.Z., I.B. and A.S.; supervision, M.Z.; project administration, M.Z.; funding acquisition, M.Z. All authors have read and agreed to the published version of the manuscript.

Funding

Free of charge publication. Research results are a part of a research project financed by the National Science Centre Poland (NCN), grant number OPUS16 2018/31/B/HS4/00570.

Data Availability Statement

No new data were created or analysed in this study.

Conflicts of Interest

The authors declare no conflict of interest.

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Energies 16 01809 g001 550
Figure 1. The evolution of publications and citations by year.
Figure 1. The evolution of publications and citations by year.
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Energies 16 01809 g002 550
Figure 2. Links between keywords in publications from the WoS database referring to issues related to ESG risk in enterprises. Source: own elaboration with the VOSviewer application.
Figure 2. Links between keywords in publications from the WoS database referring to issues related to ESG risk in enterprises. Source: own elaboration with the VOSviewer application.
Energies 16 01809 g002
Energies 16 01809 g003 550
Figure 3. Graphical presentation of the research sample structure.
Figure 3. Graphical presentation of the research sample structure.
Energies 16 01809 g003
Table
Table 1. Number of articles identified in the WoS and Scopus databases according to the selected keywords.
Table 1. Number of articles identified in the WoS and Scopus databases according to the selected keywords.
Search TermsNumber of Publications
ESG OR integrating111,416
ESG OR business 79,093
sustainability risk1434
ESG1411
ESG AND business47
Table
Table 2. Numbers and types of documents under examination.
Table 2. Numbers and types of documents under examination.
Search StringArea of SearchNumber of PublicationsPublication Types
“sustainability risk” AND sustainab* AND businessArticle title and Abstract, Keywords81Article 49
Book4
Book chapter8
Conference paper20
“ESG risk” AND sustainab* AND integrat*Article title and Abstract, Keywords12Article 12
Book0
Book chapter0
Conference paper0
“sustainability risk” AND sustainab* AND business AND incorporat*Article title and Abstract, Keywords8Article 4
Book2
Book chapter0
Conference paper2
“sustainability risk” AND sustainab* AND enterpris*Article title and Abstract, Keywords29Article 15
Book1
Book chapter1
Conference paper12
Table
Table 3. The characteristics of the research sample.
Table 3. The characteristics of the research sample.
DescriptionStructure of the Studied Publications
Year of publication 202215%
202121%
202023%
20196%
20186%
20178%
20162%
20154%
20142%
20136%
20122%
20112%
20102%
20082%
Regions where the headquarters of the surveyed companies are locatedAsia & Australia36%
Europe26%
North America18%
Latin America10%
Africa10%
The level of the country’s developmentDeveloped countries53%
Developing countries 47%
The size of the companiesLarge enterprises 58%
SME29%
Small enterprises11%
Start-ups2%
The industry in which the company operatesManufacturing/production60%
Service40%
Table
Table 4. ESG risk management practices and enterprise size.
Table 4. ESG risk management practices and enterprise size.
Small EnterprisesSME SectorLarge EnterprisesStart-Ups
Sustainable (green) supply chain17%20%14%0%
ESG risk management42%40%35%50%
ESG risk in decision-making/investment processes17%27%22%50%
ESG risk in business model8%10%16%0%
Communication with stakeholders8%3%5%0%
Risk culture8%0%8%0%
Table
Table 5. ESG risk management practices and enterprise location.
Table 5. ESG risk management practices and enterprise location.
EuropeNorth AmericaLatin AmericaAsia & AustraliaAfrica
Sustainable (green) supply chain13%15%15%19%10%
ESG risk management38%33%46%41%67%
ESG risk in decision-making/investment processes18%26%23%22%19%
ESG risk in business model18%11%15%11%5%
Communication with stakeholders8%4%0%2%0%
Risk culture5%11%0%6%0%
Table
Table 6. ESG risk management practices and type of business activity.
Table 6. ESG risk management practices and type of business activity.
Manufacturing/Production/IndustryService
Sustainable (green) supply chain18%10%
ESG risk management34%41%
ESG risk in decision making/investment processes20%31%
ESG risk in business model15%10%
Communication with stakeholders8%4%
Risk culture5%11%
Table
Table 7. ESG risk management practices and the level of development of the country of origin of the company.
Table 7. ESG risk management practices and the level of development of the country of origin of the company.
Developing CountriesDeveloped Countries
Sustainable (green) supply chain25%21%
ESG risk management41%18%
ESG risk in decision-making/investment processes22%24%
ESG risk in business model9%21%
Communication with stakeholders0%2%
Risk culture0%6%
Table
Table 8. ESG risk management activities and companies’ characteristics.
Table 8. ESG risk management activities and companies’ characteristics.
Risk IdentificationRisk MonitoringRisk Mitigation
Company size
SME sector29%29%43%
Large enterprises40%40%20%
Location
Europe40%30%30%
North America38%25%38%
Latin America43%29%29%
Asia & Australia44%38%19%
Africa40%20%40%
Type of business activity
Manufacturing/Production/Industry40%40%20%
Service50%40%10%
Level of development of country of company’s origin
Developing Countries40%40%20%
Developed Countries38%38%23%
Table
Table 9. Cross-way table for variables: Year and Sustainable Business Strategy (0.268).
Table 9. Cross-way table for variables: Year and Sustainable Business Strategy (0.268).
YearSustainable Business StrategySum
NoYes
No13720
Yes28432
Sum411152
Source: own calculations.
Table
Table 10. Cross-way table for variables: Year and Developing Countries (0.241).
Table 10. Cross-way table for variables: Year and Developing Countries (0.241).
YearDeveloping CountriesSum
NoYes
No15520
Yes161632
Sum312152
Source: own calculations.
Table
Table 11. Cross-way table for variables: Developed Countries and Including ESG Risk in Decision Making (0.323).
Table 11. Cross-way table for variables: Developed Countries and Including ESG Risk in Decision Making (0.323).
Developed CountriesIncluding ESG Risk in Decision MakingSum
NoYes
No26531
Yes111021
Sum371552
Source: own calculations.
Table
Table 12. Cross-way table for variables: Developed Countries and Sustainable Business Strategy (0.228).
Table 12. Cross-way table for variables: Developed Countries and Sustainable Business Strategy (0.228).
Developed CountriesSustainable Business StrategySum
NoYes
No22931
Yes19221
Sum411152
Source: own calculations.
Table
Table 13. Cross-way table for variables: Developing Countries and ESG Risk in Decision Making/Investment (0.332).
Table 13. Cross-way table for variables: Developing Countries and ESG Risk in Decision Making/Investment (0.332).
Developing CountriesRisk in Decision Making/InvestmentSum
NoYes
No24731
Yes91221
Sum331952
Source: own calculations.
Table
Table 14. Cross-way table for variables: Large Enterprise and Sustainable Business Strategy (0.266).
Table 14. Cross-way table for variables: Large Enterprise and Sustainable Business Strategy (0.266).
Large EnterpriseSustainable Business StrategySum
NoYes
No16824
Yes25328
Sum411152
Source: own calculations.
Table
Table 15. Cross-way table for variables: Manufacturing/Production/Industry and ESG Risk in Business Model (0.240).
Table 15. Cross-way table for variables: Manufacturing/Production/Industry and ESG Risk in Business Model (0.240).
Manufacturing/Production/IndustryESG Risk in Business ModelSum
NoYes
No201333
Yes16319
Sum361652
Source: own calculations.
Table
Table 16. Cross-way table for variables: Service and Including ESG Risk in Enterprise Risk Management (0.271).
Table 16. Cross-way table for variables: Service and Including ESG Risk in Enterprise Risk Management (0.271).
Service and Including ESGRisk in Decision Making Including ESG Risk in Enterprise Risk ManagementSum
NoYes
No92231
Yes12921
Sum213152
Source: own calculations.
Table
Table 17. List of publications with methods of incorporating ESG risk into business models.
Table 17. List of publications with methods of incorporating ESG risk into business models.
Authors and TitleType of PublicationHow ESG Risk Is Incorporated?
Abdel-Basset, M., & Mohamed, R. (2019). A novel plithogenic TOPSIS-CRITIC model for sustainable supply chain risk management. Journal of Cleaner Production, 119586. doi:10.1016/j.jclepro.2019.119586 [76]case study▲
Aziz, N. A. A., & Manab, N. A. (2020). Does risk culture matter for sustaining the business? Evidence from Malaysian environmentally sensitive listed companies. International Journal of Management and Sustainability, 9(2), 91–100 [77]based on data ■ ♣
Jahankhani, H., Jamal, A., & Lawson, S. (Eds.). (2021). Cybersecurity, Privacy and Freedom Protection in the Connected World. Advanced Sciences and Technologies for Security Applications. doi:10.1007/978-3-030-68534-8 [78] literature review▲
Bathrinath, S., Dhanasekar, M., Dhanorvignesh, B., Kamaldeen, Z., Santhi, B., Bhalaji, R. K. A., & Koppiahraj, K. (2022). Modeling sustainability risks in sugar industry using AHP-BWM. Materials Today: Proceedings. doi:10.1016/j.matpr.2021.08.324 [79]literature, experts’ opinion ■
Brockett, A. M., & Rezaee, Z. (Eds.). (2012). Corporate Sustainability. doi:10.1002/9781119202899 [80]literature review■
Caputo, L. (2013). It’s all about your people [New York Power Authority]. 3rd Annual Forum on Asset Management. doi:10.1049/ic.2013.0173 [81]case study■ ◊ ♣
Chatzitheodorou, K., Tsalis, T. A., Tsagarakis, K. P., Evangelos, G., & Ioannis, N. (2021). A new practical methodology for the banking sector to assess corporate sustainability risks with an application in the energy sector. Sustainable Production and Consumption, 27, 1473–1487. doi:10.1016/j.spc.2021.03.005 [82]case study■ ◊
Choirun, A., Santoso, I., & Astuti, R. (2020). Sustainability risk management in the agri-food supply chain: literature review. IOP Conference Series: Earth and Environmental Science, 475, 012050. doi:10.1088/1755-1315/475/1/012050 [83]literature review▲
Dumay, J., & Hossain, M. A. (2018). Sustainability Risk Disclosure Practices of Listed Companies in Australia. Australian Accounting Review. doi:10.1111/auar.12240 [84]case study■ ◊
Hajmohammad, S., & Shevchenko, A. (2020). Mitigating sustainability risk in supplier populations: an agent-based simulation study. International Journal of Operations & Production Management, 40(7/8), 897–920. doi:10.1108/ijopm-03-2019-0192 [85]case study, based on data▲
Hossan Chowdhury, M. M., & Quaddus, M. A. (2020). Supply chain sustainability practices and governance for mitigating sustainability risk and improving market performance: A Dynamic capability Perspective. Journal of Cleaner Production, 123521. doi:10.1016/j.jclepro.2020.123521 [86]based on data▲
Juettner, U., Windler, K., Podleisek, A., Gander, M., & Meldau, S. (2020). Implementing supplier management strategies for supply chain sustainability risks in multinational companies. The TQM Journal, 32(5), 923–938. doi:10.1108/tqm-05-2019-0136 [87]case study▲
Karwowski, M., & Raulinajtys-Grzybek, M. (2021). The application of corporate social responsibility (CSR) actions for mitigation of environmental, social, corporate governance (ESG) and reputational risk in integrated reports. Corporate Social Responsibility and Environmental Management, 28(4), 1270–1284. doi:10.1002/csr.2137 [20]based on data■ ◊ ●
Kazancoglu, Y., Ozkan-Ozen, Y. D., Mangla, S. K., & Ram, M. (2020). Risk assessment for sustainability in e-waste recycling in circular economy. Clean Technologies and Environmental Policy. doi:10.1007/s10098-020-01901-3 [88]case study■
Kim, S., Wagner, S. M., & Colicchia, C. (2018). The impact of supplier sustainability risk on shareholder value. Journal of Supply Chain Management. doi:10.1111/jscm.12188 [89]based on data, case study▲
Kimanzi, M. K., & Gamede, V. W. (2020). Embracing the role of finance in sustainability for SMEs. International Journal of Economics and Finance, 12(2), 453-468. doi:10.34109/ijefs.202012213 [90]based on data■ ◊
Klute-Wenig, S., & Refflinghaus, R. (2015). Integrating sustainability aspects into an integrated management system. The TQM Journal, 27(3), 303–315. doi:10.1108/tqm-12-2013-0128 [91]case study■ ◊
La Torre, M., Leo, S., & Panetta, I. C. (2021). Banks and environmental, social and governance drivers: Follow the market or the authorities? Corporate Social Responsibility and Environmental Management. doi:10.1002/csr.2132 [92]based on data●
Lau, C.K. and Chen, H. (2022), Stakeholder perceptions on the risk factors, challenges and benefits of business sustainability practices in the Singapore construction industry. Property Management, 40 (2), 149–168. https://doi.org/10.1108/PM-02-2021-0014 [93]based on data■ ◊
Lenssen, J.-J., A. Dentchev, N., & Roger, L. (2014). Sustainability, risk management and governance: towards an integrative approach. Corporate Governance: The International Journal of Business in Society, 14(5), 670–684. doi:10.1108/cg-07-2014-0077 [94]literature review (conceptual analysis)■
Maloni, M. J., Hiatt, M. S., & Astrachan, J. H. (2017). Supply management and family business: A review and call for research. Journal of Purchasing and Supply Management, 23(2), 123–136. doi:10.1016/j.pursup.2016.12.002 [95]literature review▲
Manab, N. A., & Aziz, N. A. A. (2019). Integrating knowledge management in sustainability risk management practices for company survival. Management Science Letters, 585–594. doi:10.5267/j.msl.2019.1.004 [96]based on data■ ◊
Manab, N. A., Aziz, N. A. A., & Jadi, D. M. (2020). Sustainability risk management: an integrative framework to evaluate emerging risks and other non-quantifiable risks affecting company survival. World Review of Science, Technology and Sustainable Development, 16(2), 87. doi:10.1504/wrstsd.2020.109678 [97]based on data/case study■ ◊
Abd Manab, N., Othman, S. N., & Jadi, D. M. (2017). Analysing the Critical Factors of Sustainability Risk Management (SRM) Implementation in Managing the Emerging Risks and Non-Quantifiable Risks on Corporate Survival using Pls-Sem Path Modelling. International Journal of Economic Research 14, 463-475 [98]based on data, case study■ ◊
Mittal, M., Pareek, M., Sharma, S., Chohan, J., Kumar, R., & Singh, S. (2021, November). A Sustainable environmental change and ESG initiatives by the manufacturing and others service Industries during COVID19 Pandemic. In IOP Conference Series: Earth and Environmental Science (Vol. 889, No. 1, p. 012081). IOP Publishing. [99]literature review■ ◊
Muff K. Learning from Positive Impact Organizations: A Framework for Strategic Innovation. Sustainability. 2021; 13(16):8891. doi: 10.3390/su13168891 [100]case study■ ●
Namchoochai, R., Kiattisin, S., Darakorn Na Ayuthaya, S., & Arunthari, S. (2020). Elimination of FinTech Risks to Achieve Sustainable Quality Improvement. Wireless Personal Communications. doi:10.1007/s11277-020-07201-9 [101]based on data (survey)■ ◊
Nogueira, F. G., Lucena, A. F. P., & Nogueira, R. (2017). Sustainable Insurance Assessment: Towards an Integrative Model. The Geneva Papers on Risk and Insurance–Issues and Practice, 43(2), 275–299. doi:10.1057/s41288-017-0062-3 [102]based on data (survey)■ ●
Oduoza, C. F. (2020). Framework for Sustainable Risk Management in the Manufacturing Sector. Procedia Manufacturing, 51, 1290–1297. doi:10.1016/j.promfg.2020.10.180 [103]literature review + based on data ■
Olatoye, D. (2013). Sustainability Risks in the Supply Chain–The Nigerian Content Challenge. SPE Nigeria Annual International Conference and Exhibition. doi:10.2118/167570-ms [104]case study▲
Zu, L. (2016). Sustainability Risk and Crisis Management: A Taoism’s Perspective. In Cultural Roots of Sustainable Management (pp. 65–88). Springer, Cham. [105]literature review■ ● ▬ ♣
Zioło, M., Bąk, I., Cheba, K., & Spoz, A. (2020). The relationship between banks and company business models-sustainability context. Procedia Computer Science, 176, 1507–1516. [106]based on data■
Zhang, D., Wang, H., & Wang, W. (2022). The Influence of Relational Capital on the Sustainability Risk: Findings from Chinese Non-State-Owned Manufacturing Enterprises. Sustainability, 14(11), 6904. [107]based on data■ ● ♣
Yilmaz, A. K., & Karakoc, T. H. (2010). Enterprise Risk Management Perspective. In Global Warming (pp. 423–437). Springer, Boston, MA.
[108]		literature review■ ● ♣
Ye, Y., & Lau, K. H. (2022). Competitive Green Supply Chain Transformation with Dynamic Capabilities—An Exploratory Case Study of Chinese Electronics Industry. Sustainability, 14(14), 8640. [109]case study▲ ◊ ●
Trubetskaya, A., Horan, W., Conheady, P., Stockil, K., Merritt, S., & Moore, S. (2021). A methodology for assessing and monitoring risk in the industrial wastewater sector. Water Resources and Industry, 25, 100146. [110]case study■ ◊
Tobescu, C., & Seuring, S. (2015). Internal enablers for the implementation of sustainable supply chain risk management systems. In Logistics Management (pp. 17–26). Springer, Cham.
[111]		experts’ opinion ▲ ■ ●
Thöni, A., Madlberger, L., & Schatten, A. (2013). Towards a data-integration approach for enterprise sustainability risk information systems. In Proceedings of the 7th International Conference on Research and Practical Issues of Enterprise Information Systems, Linz. [112]literature review, based on data▲ ■
Sutrisno, A., Kumar, V., Handayani, D., Arief, R. K., Virdhian, S., & Punuhsingon, C. (2019, July). Categorization of supply chain sustainability risks in SMEs: A preliminary evidence from a developing country. In Proceedings of the International Conference on Industrial Engineering and Operations Management Pilsen, Czech Republic (pp. 23–26). [113]literature review▲ ■ ●
Sutrisno, A., & Kumar, V. (2022). Supply chain sustainability risk decision support model using integrated Preference Selection Index (PSI) method and prospect theory. Journal of Advances in Management Research. [114]case study▲ ■
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Symbols meaning: ▲ Sustainable (green) supply chain; ■ ESG risk management; ◊ ESG risk in decision-making/investment processes; ● ESG risk in business model; ▬ Communication with stakeholders; ○ Circular economy; ♣ Risk culture.
Table
Table 18. The way of integrating sustainability risk in the selected companies.
Table 18. The way of integrating sustainability risk in the selected companies.
CompanyThe Way of Integrating Sustainability Risk in Companies’ Business Models
RWEESG risk included in risk management ■, ESG incorporated in business model ●, Sustainable (green) supply chain ▲
Enel S.p.A.ESG risk included in risk management ■, ESG incorporated in business model ●, Sustainable (green) supply chain ▲
NesteESG risk included in risk management ■, ESG incorporated in business model ●, Sustainable (green) supply chain ▲
Symbols meaning: ▲ Sustainable (green) supply chain; ■ ESG risk management; ● ESG risk in business model.
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Zioło, M.; Bąk, I.; Spoz, A. Incorporating ESG Risk in Companies’ Business Models: State of Research and Energy Sector Case Studies. Energies 2023, 16, 1809. https://doi.org/10.3390/en16041809

AMA Style

Zioło M, Bąk I, Spoz A. Incorporating ESG Risk in Companies’ Business Models: State of Research and Energy Sector Case Studies. Energies. 2023; 16(4):1809. https://doi.org/10.3390/en16041809

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Zioło, Magdalena, Iwona Bąk, and Anna Spoz. 2023. "Incorporating ESG Risk in Companies’ Business Models: State of Research and Energy Sector Case Studies" Energies 16, no. 4: 1809. https://doi.org/10.3390/en16041809

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