A Systematic Review: How Does Organisational Learning Enable ESG Performance (from 2001 to 2021)?

Abstract

This paper aims to examine the relationship between organisational learning and ESG (environmental, social, and governance) performance. The PRISMA protocol was followed by full-text reading 57 peer-reviewed academic journal articles published in different international journals from 2001 to 2021. After investigating and synthesising the empirical papers, the author found that organisational learning is instrumental to derive the fundamental factors and mechanisms to drive ESG performance. The findings of this research provide the first comprehensive assessment of the relationship between organisational learning and ESG, as well as highlight that organisational learning related to ESG is significantly important to ESG performance, which lies in the overlooked and hidden extant studies. The major contribution of this study is to connect organisational learning with ESG performance from a holistic perspective through different learning loops and put stress on the importance of two learning loops to better facilitate ESG strategy through ‘2P’ (people and process). Specifically, the conceptual framework of two learning loops was developed, which could lay the foundation for scholars’ future research on organisational learning related to ESG performance, such as single-loop learning about the process (i.e., control system, decision-making, ethics, gender balance, human resource management, knowledge management, risk management, and training), and double-loop learning about the roles of people (i.e., practitioners, professionals, managers, and the top management team). The ‘PPT’ (people, process, and technology) approach is also designed for future testing and validation to transform single-loop learning into double-loop learning.

1. Introduction

There are a multitude of terms indicating the sustainability of corporate engagement with environmental and societal challenges such as corporate social responsibility (CSR), environmental, social, and governance (ESG), and business ethics [1]. The imperative of environmental, social, and governance (ESG) is at the leading edge of the next big wave of all business activities around the world. In recent years, numerous studies have attempted to measure the performance and valuation impact of ESG factors. ESG is becoming increasingly more crucial in influencing companies’ financial performance [2]. Still, ESG has gained more traction as an approach to reduce risk and detect new business opportunities [1]. In order to have a viable future, companies have to attach the importance to their sustainability strategies and ESG disclosures [3]. A firm performing excellently in ESG activities will significantly increase its positive market perception and reputation [4], improve its long-term value by meeting its social obligations [5], and fulfill its environmental responsibilities [6]. Now, it must be admitted that academic researchers related to ESG indicate that ESG performance and ESG disclosure are highly correlated with a firm’s valuation, sustainable development, shareholder satisfaction, and long-term strategy [7]. However, little attention has been given to analyzing the process of how ESG can be embraced throughout the entire organisation.

According to the definition of organisational learning, organisational learning related to ESG (integration with strategies and operations) could be a process through which experience is converted into tacit and explicit knowledge, which, in reverse, learning and acquiring new knowledge in ESG practice that will affect future ESG performance [8]. Moreover, organisational learning refers to the way that an enterprise establishes and improves its organisational knowledge and operation mode under a specific behaviour and culture and enhances enterprise adaptability and competitiveness through the continuous application of relevant methods and tools [9]. Based on the above, organisational learning related to ESG integration must be delivered to improve ESG performance. Hence, it is urgent at present to identify the association between ESG performance and organisational learning. However, previous studies of ESG have not dealt with the correlation between organisational learning and ESG performance. Moreover, while there are several studies on ESG issues, there has been no systematic review on the theme, since a search of the Web of Science and SCOPS database by the keywords ‘Environmental, Social, and Governance’ and ‘organis(z)ational learning’ and ‘Systematic Literature Review’ obtained no results at all. The existing literature on ESG focuses on the investing benefits for disclosing information regarding materiality assessment rather than analyzing ESG performance related to long-term value. The fragmentation of the current literature compounds the urgency for a systematic review on the main contributions and discoveries in the field. To fill the gap existing in the literature, the objective of this research is expected to investigate a systematic review to examine the following two questions:

(1)

Consolidate the state of the research to date on the liaison between organisational learning and ESG (integration with enterprise strategy and operations).

(2)

How does organisational learning affect ESG consequences, including the questions such as how can a common consciousness (values and norms) be increased, and what are the main factors influencing the process (strategies and assumptions) of organisational learning related to ESG?

This paper will be a reference to all the corporations and organisations to integrate knowledge and insights to create core competencies, enhances the adaptability, and improves the competitiveness through learning the ESG proposition. After this introduction, the following structure is contained in the research: a literature review on this theme in Section 2, then a description of the methodology adopted and followed by presenting our results in Section 3, and finally, conclusions, limitations, and suggestions for future lines of research are presented in Section 4, Section 5 and Section 6.

2. Literature Review

2.1. ESG (Environmental, Social, and Governance)

2.1.1. The Background of ESG

ESG (environmental, social, and governance) is the acronym which is often used to capture an organisation’s performance on these parameters in financial analysis [10]. The beginning of ESG factors in Corporate Financial Performance (CFP), which can be traced to the 1970s, producing more than 2000 works [11]. Since the advocacy of the United Nations Environmental Programme Financial Initiative (UNEP FI) in 1992, financial institutions gradually began to integrate ESG factors into the decision-making process. Then, ESG became one of the three main dimensions for the international communities to measure the ability of the sustainable development of economic entities [2]. The United Nations promulgated the Principles for Responsible Investment (PRI) in 2006, initiating the link between ESG factors and investment performance [12]. In August 2019, the US Business Roundtable released a new statement signed by 181 of the world’s largest companies, declaring the purpose of a corporation is not just to serve shareholders but to create value for all stakeholders, including customers, employees, suppliers, communities, and shareholders. The new statement contains five commitments: delivering value to customers, investing in employees, dealing fairly and ethically with suppliers, supporting the communities in which we work, and generating long-term value for shareholders. Placing the responsibility of shareholders in fifth place is a significant change of attitude [13].

As business is deeply intertwined with ESG concerns, thinking, and acting on ESG in a proactive way has lately become even more pressing [14]. Up to now, with a focus on supporting green and low-carbon development in the fields of energy saving, environmental protection, and clean energy, more and more governments, financial institutions, and individual investors have begun to scrutinise companies’ ESG performance [15]. Particularly, some scholars have highlighted the trend of green and sustainable human resource management, which shall be taken into consideration in future ESG strategies [16]. Therefore, it is urgent to design ESG training programs for practitioners in the human resource department [17]. As a result, the future landscape of companies can barely be accomplished without disclosing ESG information, which includes various dimensions related to the environment, society, and government [3].

2.1.2. The Theoretical Fundamentals of ESG

Unfortunately, all the conclusions of studies have still been limited by a lack of robust systematic theoretical fundamentals directly related to ESG. According to Huang, the strongest theoretical foundations of ESG have come from sustainable development theory, economic externality theory, and corporate social responsibility theory (CSR) [18].

Firstly, sustainable development can be defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs [19]. Throughout multi-international organisations’ views of ESG initiatives and propositions, it can be easily found that the most framework of ESG reports will help stakeholders to evaluate the risk and opportunity of corporate sustainable development, as the main objective of the ESG report. Among the five-dimensional reporting framework of the Standards Board for Sustainable Development, there are 11 indicators out of 17 indicators implying the philosophy of socially and environmentally sustainable development, including environmental protection, social capital, and human capital.

Secondly, externality for the governments provides the theoretical foundation to control business activities and information disclosure (including financial reports and ESG reports) beyond the market mechanism [20]. External economic theory embodies much more in the environmental aspect of ESG, such as a collection of sewage charges, trading of carbon emission rights, new energy vehicle subsidies, and other areas implying various degrees of external economic theory. The information provided by the ESG report can not only provide a decision-making basis for administrative intervention and regulation, but also significantly reduce transaction costs of administrative intervention and control. Adopting incentive policies for positive externalities of enterprises can more effectively guide low-carbon development and green transformation of enterprises with fewer supervision costs.

Thirdly, the ESG Report is deeply influenced by CSR theory. The basis of what is to be the modern definition of CSR is rooted in Archie Carroll’s ‘Pyramid of Corporate Social Responsibility’, including four types of responsibilities in a corporation: economic responsibility, legal responsibility, ethical responsibility, and philanthropic responsibility (also called discretionary responsibility) [21]. Similarly, the concept of the triple bottom line (TBL) which includes the ‘3Ps’ (people, planet, and profit), hopes to switch business system, which is the focus of current financial accounting, to a more comprehensive assessment including ecological and social performance, in addition to economic performance [22]. As a result, CSR changes the mental model from shareholder primacy to stakeholder theory [23], which lays a solid theoretical foundation for ESG, and creates a new paradigm of paying more attention to the issues of environment, social issues, and governance.

In short, sustainable development theory, economic externality theory, and CSR theory are the theoretical foundation from which ESG can draw abundant ideological nutrients.

2.1.3. The Implementation of ESG

The world has witnessed exponential growth in the number of corporations that measure and report ESG data, including environmental information (e.g., carbon emissions, water consumption, waste generation), social information (e.g., employee makeup, product information, customer-related information), and governance information (e.g., political lobbying, anticorruption programs, board diversity) [24]. The ESG factors, which are listed in

Table 1. ESG (environmental, social, and governance) factors incorporated by financial institutions into decision-making processes (Reprinted from Ziolo, M.; Filipiak, B.Z.; Bąk, I.; Cheba, K. (2019)) [25].

Environment	Social	Governance
Carbon intensity emission	Business behaviour	Antitakeover policy
Climate change	Community relations	Audit and control system
Control of environmental impacts	Corporate citizenship/philanthropy	Board diversity
Eco-design (financial green)	Customer relationship management	Board structure
products and services)	Customer and product responsibility	Board management
Eco efficiency	Diversity	Business ethics and fraud
Emissions	Human capital development and training	Codes of conduct/compliance
Energy consumptions	Human rights criteria	Corporate government functions and
Environmental policy	Labor management	commitments
Management	Local suppliers	Prevention of corruption and bribery
Environmental reporting	Market ethics	Remuneration of members of executive team
Environmental risk management	Non-discrimination, promotion equality	Respect of shareholders rights
Hazardous waste	Privacy and data security	Risk and crisis management
Materials recycled and reused	Protection of children	Transparency
Packaging	Exclusion of children labor	Vision and strategy
Pollutions management/resources	Quality of working conditions	Antitrust policy
Protections of biodiversity	Respect of trade unions	Industry specific criteria
Raw material sourcing	Responsible investing
Renewable energy consumption	Rights of indigenous people
Travel and transport impact	Social reporting
Waste management reduction	Stakeholder engagement
Water use and management	Supply chain management
Industry-specific criteria	Talent attraction/retention
	Work-life balance
	Industry-specific criteria

, were taken into consideration by financial institutions (especially rating agencies) [25]. Phenomenologically, ESG is viewed as an indexing technique used in business and investing to measure a company’s performance across multiple areas of social responsibility. Therefore, there are many famous ESG data agents (e.g., Bloomberg, Thomson Reuters, and Investments banks (Morgan Stanley Capital International (MSCI)), which have created some ESG ratings or ESG scores, causing a consequential underlying bifurcation [26]. ESG score ratings and opinions of ESG are coexistent, perceived, and applied as similar indexes [27].

In general, the three individual parts (environmental, social, and corporate governance) are intertwined as ESG is an inextricable part of how business is carried out [14]. It can be seen from Table 1 that ESG factors broadly contain multidimensional issues related to the environmental aspect (e.g., climate change, energy and water use, carbon emissions), social responsibility (e.g., fair trade principles, human rights, product safety, gender equality, health and safety), and corporate governance (e.g., board independence, corruption and bribery, reporting and disclosure, shareholder protection) [28]. Moreover, ESG criteria are considered to be a crucial value for success [29]. Hence, ESG issues have become a risk management concern for investors, shareholders, and governments, while they have become an emerging part of competitive strategy for firms [28]. According to Thomson Reuters, corporations with a strong ESG performance tend to remain sustainable over the years by managing business goals successfully [30]. As a result, ESG practices can lower supply chain risks, reduce dependencies on supplier misconduct, and build truly responsible supply chains [31]. Still, listed companies around the world are shifting from short-term goals of maximising profits to long-term sustainable environmental, social, and governance (ESG) goals [2].

2.2. Organisational Learning

2.2.1. A Historical Overview of Research on Organisational Learning

Generally, the origin of organisational learning can be traced to the late 1970s, when researchers studied it from a psychological viewpoint [32]. When it comes to organisational learning, there are two schools of thought, Argyris and March [8]. Argyris emphasises defensive reasoning [33], while March focuses on encoding lessons from experience into routines that guide future performance [34]. To some extent, research on the two streams of organisational learning converged in the 1990s [8,35].

Organisational learning refers to the way that an enterprise establishes and improves organisational knowledge as well as operation mode under specific behaviour and culture, and enhances adaptability and competitiveness through the continuous application of relevant methods and tools [36]. Furthermore, organisational learning is ‘the process through which organisations change or modify their mental models, rules, processes or knowledge, maintaining or improving their performance’ [37]. Throughout the manuscript, the term ‘organisation’ in the organisational learning broadly refers to individuals, teams (e.g., groups, departments, etc.), organisations, and inter-organisation levels. According to Marquardt, organisational learning is not limited to learning at the individual, group, and organisational levels, respectively, which can happen simultaneously [36]. The process of organisational learning is converted from previous experience performing into knowledge, which, in turn, changes the organisation and affects its future performance [8]. As a result, it is a dynamic process of knowledge concerning tacit and explicit knowledge. The best-known conceptual framework of knowledge creation is the never-ending spiral of tacit and explicit knowledge through four modes of knowledge conversion, including socialisation (from tacit to tacit), externalisation (from tacit to explicit), combination (from explicit to explicit), and internalisation (from explicit to tacit) [38,39], in which the continuous dialogue amplifies it across different ontological levels (individual, organisational, inter-organisational).

2.2.2. Single- and Double-Loop Learning

Single- and double-loop learning theory is used to analyze learning processes. Argyris and Schon’s pioneered the theory and concepts of single- and double-loop learning [32,40,41,42,43,44,45], which views human agents as designers of action. Then, Argyris and Schon set different definitions to distinguish single-and double-loop learning in order to categorise the character of the proposed solutions to the challenges [32,46]. Moreover, there are other theories of organisational learning such as organisational knowledge creation theory [47], and Garvin’s five building blocks [48,49]. Our manuscript focuses on single- and double-loop learning theory, which is shown in Figure 1.

A mode of single-loop learning hypothesises that human behaviour reflects the most satisfactory solution people can find associated with their governing values or variables, or people learning to combine strategies with their governing values or variables [9]. Single-loop cluster is trying to alleviate the problems of performance management during implementation. Consequently, top management teams tend to become frustrated with the ineffectiveness of the decision-making process and react by striving to increase control under these conditions [9]. Double-loop solutions are trying to respond and propose to transform (parts of) the system. A mode of double-loop learning can prevent the consequences of a model based on single-loop learning, but the governing values or variables are not the opposite of single-loop learning [9]. Furthermore, double-loop learning has the enormous potential to improve the added value of performance management given in some complex and ambiguous contexts [50]. However, the unilateral control that usually accompanies advocacy is turned down in the double-loop model, which means that TMT must be skilled in eliciting double-loop learning [9]. In short, single-loop learning emphasises ‘doing things right’, while double-loop learning focuses on ‘doing the right things’ [51].

Admittedly, organisational learning may result in widely different outcomes. In single-loop learning, errors are detected and corrected ‘without questioning or altering the underlying values of the system’ [32], while ‘errors are corrected by changing the governing values and then the actions’ in the double-loop learning [52]. In addition, Argyris mentioned that it is difficult to conceptualise models of transition from single-loop learning to double-loop learning that does not violate the requirement of the latter [9].

2.2.3. The Effectiveness of Organisational Learning

So far, many academics have carried out extensive research on the effectiveness of organisational learning. For example, some scholars have found that learning impacts the performance of the firm and/or moderates the effect of other variables on firm performance in several ways [53]; some scholars have found that organisational learning significantly elevates the effectiveness of acquisitions, diversifications, and foreign entries [54,55,56]; and some scholars have found that organisational learning contributes to growing customer orientation and to facilitating innovation [57,58,59]. Simultaneously, other researchers have found that organisational learning accelerates the application of information systems and business process re-engineering [60,61]. Moreover, some researchers have illustrated that the goal of organisational learning is to successfully adapt to changing environments, adjust under uncertain conditions, and increase efficiency [62], while others have manifested that organisational learning is also one of the vital sources to achieve competitive advantage in strategic management [63]. In addition, Peter Senge also pointed out that organisational learning is a process of enhancing strategic flexibility [64]. Recently, some scholars also found that the employees’ learning or training significantly affects the competitiveness of SMEs (small and medium-sized enterprises) [65], the investment of various vocational training programs in enterprises has relevant links to economic performance on a macroeconomic level [66], and the learning orientation, especially entrepreneurial education, acts as a mediator between entrepreneurial orientation and firm performance [67].

However, inadequate learning processes may result in misleading implications. Organisations, therefore, depend on systematic approaches to gain the ability for systematic learning, which means one approach is not promising [49]. Thus, it is of great importance to apply multiple approaches across the people, process, and technology categories (PPT approach), in order to cover the variety of organisational learning theories that may lead to synergetic effects [49], for example, process approaches such as communities of practice, cross-functional teams, research and development, and training. Technology approaches, such as knowledge repositories and virtual worlds, and people-based approaches, such as knowledge broker, knowledge manager, and CKO in the top management team (TMT), can be applied jointly to improve the effectiveness of organisational learning and achieve permanent competitive advantage [49].

3. Methodology

The author conducted a systematic review of the empirical research on organisational learning and ESG through the identification procedure in the following databases: Web of Science, Emerald Insight, and Springer. The researcher followed the PRISMA protocol to capture all the empirical evidence related to organisational learning and ESG. According to the systematic approach of Tranfield et al. [68], the first step is to identify the relevant keywords and search the terms, the researcher decided to search terms broadly in order to grasp all of the various conceptualisations of both organisational learning and ESG. Figure 2 visualises the inclusion PRISMA process flow. And the PRISMA checklist is available in the Supplementary Materials [69].

Although there are thousands of articles on ESG or organisational learning separately, there are a very limited number of articles that overlap the two subjects. When selecting the articles, the researcher tried to cover heterogeneous organisational learning, in the broader sense, since each reviewed article has a different understanding of ESG and organisational learning or it comes from their perspectives of ESG and organisational learning. Meanwhile, the theoretical foundations of ESG which are demonstrated in the literature review part, consist of sustainable development theory, economic externality theory, and corporate social responsibility theory (CSR) [18]. Given the facts above, the researcher selected 17 keywords based on the above definitions in the literature review part. In Summary, the keywords and search terms in

Table 2. Summary of the keywords and search terms for systematic review.

‘organisational learning’ or ‘organizational learning’
ESG or ‘Environmental, Social, Governance’
17 additional keyword: ‘sustainab*’ or ‘CSR' or ‘corporate social respons*’ or ‘economic externality’ or ‘creat* knowledge’ or ‘retain*knowledge’ or ‘transfer* knowledge’ or ‘gain* knowledge’ or ‘individual learning’ or ‘team learning’ or ‘inter-organisational learning’ or ‘communities of learning’ or ‘group learning’ or ‘knowledge transfer*’ or ‘knowledge retent*’ or ‘knowledge creat*’

are used for this systematic review. With the selected keywords in the Boolean operator’s search, Appendix A shows the details of searching strings for three databases. As a result, the researcher used the keywords below when selecting the reviewed articles.

Specifically, the researcher searched the terms ‘organisational learning’ and ‘organizational learning’ and retrieved more than 437,839 articles. Then, searching the terms of ESG or ‘Environmental, Social, Governance’, yielded more than 133,756 results. Thirdly, the researcher used the search terms to capture the definition of ESG, including ‘sustainab*’ (to capture sustainability, sustainable, etc.), CSR or ‘corporate social respons*’, and ‘economic externality’. Regarding organisational learning, the search terms included ‘creat* knowledge’, ‘retain*knowledge’, ‘transfer* knowledge’, ‘gain* knowledge’, ‘individual learning’, ‘team learning’, ‘inter-organisational learning’, ‘communities of learning’, ‘group learning’, ‘knowledge transfer*’, ‘knowledge retent*’, ‘knowledge creat*’—thus the researcher got an initial search pool of more than 1,696,592 articles. In addition, at least one of 17 additional keywords must appear in the title or abstract or keywords. When the above results were combined, these search terms yielded 674 papers that included both ESG and organisational learning in their subject terms. According to an assessment of empirical research, Newbert and a systematic assessment of the empirical support [70,71], the researcher then used the seven ‘methodological’ keywords (data or empirical or test* or statistic* or finding* or result* or evidence) to limit the search to only empirical studies, resulting in 603 articles. Further, narrowing the list to a peer-reviewed academic journal in the English language and the publication year from 2001 to 2021, yielded 213 papers. After removing the duplicates, the researcher retrieved 211 articles for further analysis. Then, the researcher retrieved 58 articles after the title and abstract screening, narrowing down the research area focusing on business economics or behavioural sciences or operations research or management science. The last search of this systematic review was on 20 January 2022. After the full-text reading, 52 records were retrieved from the database. For example, some articles only elaborated either on ESG performance or social learning in the single perspective. These articles were excluded after reading the whole text [72,73]. To improve the data, the researcher sources 5 records from other resources. Consequently, 57 articles qualified for this systematic review.

4. Results

4.1. Article Characteristics

Overall, the systematic literature review was conducted on studies from 57 peer-reviewed academic journal articles published in 34 different international journals (average JCR impact factor = 3.658) from 2001 to 2021. The average JCR impact factor (selected year) was based on 48 articles while the other 9 articles did not have JCR impact factors or did not have the JCR impact factor in the published year. Full details are given in SM Table S2. In addition, more than half the articles (61.4%) were published in the recent three years, and 54.4% were published in eight journals, including the Journal of Business Ethics (14%), Journal of Cleaner Production (12.3%), Sustainability (8.8%), British Food Journal (5.3%), Corporate Governance: The International Journal of Business in Society (3.5%), Journal of Management and Governance (3.5%), International Journal of Supply Chain Management (3.5%), and Sustainability Accounting, Management and Policy Journal (3.5%). The distribution of published journals is shown in

Table 3. Distribution of articles by journals and percentage.

Journals Publishing Organisational Learning and ESG Research
NO	Source Title	No. of Articles	% of Total Articles
1	Annals of Operations Research	1	1.8%
2	British Food Journal	3	5.3%
3	Business Strategy and the Environment	1	1.8%
4	Corporate Governance: The International Journal of Business in Society	2	3.5%
5	Data Technologies and Applications	1	1.8%
6	Environment, Development and Sustainability	1	1.8%
7	Environment Systems and Decisions	1	1.8%
8	Global Journal of Flexible Systems Management	1	1.8%
9	Journal of Organizational Change Management	1	1.8%
10	Journal of Applied Accounting Research	1	1.8%
11	Journal of Business Ethics	8	14.0%
12	Journal of Cleaner Production	7	12.3%
13	Journal of Environmental Planning and Management	1	1.8%
14	Journal of Management and Governance	2	3.5%
15	Journal of Intellectual Capital	1	1.8%
16	Journal of Service Management	1	1.8%
17	Journal of Strategy and Management	1	1.8%
18	Intereconomics	1	1.8%
19	International Journal of Pharmaceutical and Healthcare Marketing	1	1.8%
20	International Journal of Accounting Information Systems	1	1.8%
21	International Journal of Disclosure and Governance	1	1.8%
22	International Journal of Entrepreneurial Behavior & Research	1	1.8%
23	International Journal of Operations & Production Management	1	1.8%
24	International Journal of Productivity and Performance Management	1	1.8%
25	Management Decision	1	1.8%
26	Managerial Auditing Journal	1	1.8%
27	Management Science	1	1.8%
28	Operations Management Research	1	1.8%
29	Review of Managerial Science	1	1.8%
30	Society and Business Review	1	1.8%
31	Supply Chain Management-An International Journal	2	3.5%
32	Sustainability	5	8.8%
33	Sustainability Accounting, Management and Policy Journal	2	3.5%
34	Sustainability Management Forum | NachhaltigkeitsManagementForum	1	1.8%

.

4.2. Data Analysis

The 57 reviewed articles recorded the different loops on organisational learning of ESG integration with strategies and operations and they were tagged with a positive or negative relationship. In this section, the researcher applied qualitative data analysis to categorise the character of the proposed learning loops of organisational learning related to ESG integration with strategies and operations. The classification of organisational learning is associated with the single- and double-loop learning theory [9]. The researcher summarised the data from the reviewed articles, which are classified by values and norms, strategies and assumptions, consequences (positive or negative), single-loop learning, double-loop learning, and single- and double-loop learning. Table S3 in the SM presents the full details.

Furthermore, the researcher identified that there were only 12 double-loop learning articles among the 57 reviewed articles, while there were 89 single-loop learning articles. Of all the single and double-loop learning cases, 88.24% of them showed that organisational learning has a positive effect on ESG performance, while 3.92% showed a negative impact on ESG performance.

4.3. Synthesis

Based on our findings from the 57 reviewed articles, the author argues that organisations have a specific capability that allows them to learn through the single- and double-loop to react to endogenous or exogenous shocks related to ESG and remain effective. This learning allows organisations to introduce strategies and assumptions as well as values and norms without losing a competitive advantage for a certain period. Using the grounded theory approach, the gathered data was categorised and interpreted [74]. Single-loop learning was divided into four dimensions including internal management, external management, external and internal management, and governance. Double-loop learning was interpreted into five dimensions including entrepreneurs, managers, practitioners, professionals, and top management teams. Subsequently, the researcher encoded the nine dimensions as ‘2P’ (people and process), which was a synthesis of people (double-loop learning) and processes (single-loop learning). The researcher outlined the empirical grounding of organisational learning with evidence from the 57 reviewed articles in SM Table S3. Figure 3 visualises single-loop learning with different sets of constructs while Figure 4 visualises double-loop learning with different sets of constructs. The first order constructs of single-loop learning are included in the

Table 4. The first order constructs of single-loop learning.

1st Order-Constructs of Single-Loop Learning
Process	Strategies and Assumptions
Internal management: decision-making (19)	Russian firms with innovativeness
	Russian firms with higher level of risk-taking
	internationalized Russian firms
	the integration and coordination of the activities of supply chain partners
	Clarity of the essence of the existence of an organization; Alignment of operational and strategic goals
	firms that are more exposed to sustainability issues and integrated sustainability issues more into their business operations and strategy.
	MNEs' sustainability strategies;
	resource availability for implementing sustainability initiatives.
	reshape supply chains and production operations(O/SCM)
	the characteristics and choices involving motivations and capabilities of small- and mediumsized enterprises
	the more sincere motivations, and more capability relevant commitments
	The higher CSP standards peer firms adopt
	CSR practices for the Iranian pharmaceutical distribution companies including five underlying dimensions: employee relations, corporate governance, societal concern, economic and financial concern and environmental concerns.
	facilitate the adoption of transparency framework
	implementing the a multiple criteria decision making (MCDM) algorithm
	developing a conceptual model to associate sustainability and performance in a manufacturing system—the Sustainability Evaluation Model (SEM)
	design of natural resource and environmental management (NREM) and public involvement
	corporate social responsibility(CSR) engagements using participation in the United Nations Global Compact (UNGC) as a proxy
	the inclusion of ESG factors in the decision-making processes of financial institutions
Internal management: knowledge management (14)	WikiRate, a peer-production platform based on situativity, which requires a robust level of objectivity for producing reliable knowledge about the ESG performance of companies.
	developing big data and predictive analytics (BDPA) capabilities
	developing big data and predictive analytics (BDPA) capabilities
	Organizational knowledge sharing
	Certification according to ISO 14,001—Environmental Management System
	learn more about the impact of climate risk on the default risk of companies from different sectors and geographies and how to integrate climate risk into current models that measure credit, market and operational risks.
	Ghanaian listed firms learned their integrated reporting (IR) practices from the developed countries.
	incorporate the shareholder, investors and companies’ knowledge to carry out analysis/assessment
	utilizing the Extreme Gradient Boosting (XGBoost) algorithm, a statistical nonlinear machine learning approach
	analysis of the relationship between the context of performance in which Microfinance Institutions (MFIs) operate and their activity
	a Kruskal-Wallis H test has been performed on the data provided by the Institutions
	developing and using institutions, establishing standards, codes of conduct, and various CSR practices.
	the level of ESG information disclosure
	Providing transparency and high-quality firm ESG information
Internal management: training (6)	form of commitment with professional CSR traning
	intense efforts of educated institutional work and scientific research
	entrepreneurial learning at the societal level /ignorance-based divergence of entrepreneurial learning
	Implementation of ISO 26,000—guidelines for corporate social responsibility;
	learn from both COVID-19 experiences and earlier efforts toward sustainability
	learning about Sustainability Accounting Standards Board (SASB) standards (i.e., the release of SASB standards changes managers’ information set)
Internal management: risk management (3)	MICRO LEVEL Business Risks management including operational risk, occupational risk, Int. Financial risks, marketing risks, strategic risks, reputational risks.
	MESO LEVEL Competitive Risk management including ext. financial risks, economic risks, social risks, technological risks, supply chain risks, cyber risks.
	MACRO LEVEL Systematic Risk management including geopolitical risks, compliance risks, macroeconomic risk, social instability risk, environmental risks, pandemic risks
Internal management: culture (3)	Strength of organizational culture
	management of the views of headquarters towards sustainability;
	local cultural sustainability perspectives in developed and developing host countries;
Internal management: stucture (2)	instrumental strategic orientation, achieving better business results and tend to have a more hierarchical management structure.
	equidistant orientation, have not yet fully implemented sustainability into their overall business strategy
Internal management: gender balance (2)	the feminization of boards, when two, three or more women are appointed in aboard, they act as active minorities,
	the presence of women on company boards, especially non-executive women
Internal management: human resource (2)	Rewarding employees for achieving goals; Acquisition of top talents from the university
	CSR-linked executive compensation incentives
Internal management: ethics (2)	changes in the Covalence Ethical Quote (CEQ), a comprehensive index that produces quarterly announcements ranking the ethical behavior
	applying codes of conduct and sustainability certifications,
Internal management: digitisation (1)	Corporate Digital Responsibility (CDR) strategy, CDR comprises topics from all domains of the ESG framework
Internal management: technology (1)	a problem-solving tool in the context of the sugarcane ethanol industry
Internal management: control system (1)	suggest an innovative model of a sustainability management control system (SMCS)
External management: policy (5)	sustainability indicator scoring (SIS) for the food supply chain, national policy level
	compliance with governance regulation/compliance-related and strategy-related dimensions of governance
	ESG scores and risk have bi-directional effects on each other
	materiality disclosure quality (MDQ) in integrated reporting (IR)
	The ethanol social certificate the government created, the actions of the National Commitment program
External management: environmental (2)	applying the idea of management and control systems (MCS) to environmental issues
	applying the environmental management control systems (EMCS)
External management: media (2)	various facets of media attention
	the popularity of Twitter as a CSR disclosure platform
External management: politics (1)	political connections within the board and top management in the Canadian listed companies
External management: social (1)	according to their corporate and social engagement, segment the different members of the BPA (a regional mutual bank in Western France: Banque Populaire Atlantique)
External management: assurance (1)	the purchase of external assurance on the CSR report
External & Internal management: SSCM (3)	both environmental and social supply chain management (SSCM)
	the assessment of supply chain social responsibility in an international arena.
	sustainable supply chain management (SSCM) Strategy (Reavtive, Contirbutive); SSCM Governmence (Assessment, Involvement)
External & Internal management: Other (3)	social innovation in service (SIS)
	firm size, media visibility and ownership structure are the most important drivers of the disclosure of sustainability reports
	Good ESG performance of large-scale listed power generation companies in China
External & Internal management: Intellectual capital (2)	intellectual capital and knowledge management
	intellectual capital related to sustainability
External & Internal management: CSR (1)	CSR as a contemporary foundation
governmance (12)	Effective corporate and governance mechanisms
	Corporate Social & Environmental Responsibility (CSER) engagement in the food industry.
	Corporate Social & Environmental Responsibility (CSER) engagement in the food industry.
	CSR governance
	CSR outcomes
	social outcomes
	corporate governance only seems to have an influence on the existence of audit or sustainability committees
	Independent Directors
	presence of Lead Independent Director
	Age of the Youngest Director
	Shareholder Engagement on ESG Performance
	Board pledge rate

demonstrating the content clearly.

5. Discussion

The purpose of this study is to test the state of the research to date on the relationship between organisational learning and ESG (integration with strategies and operations) and identify how organisational learning affects ESG consequences. To address these questions, the researcher has carried out a systematic review of three databases (Web of Science, Emerald Insight, and Springer) from 2001 to 2021. Overall, 57 records from 34 different journals have been full-text reviewed. With the reviewed articles, the researcher can unravel various dimensions of organisational learning related to ESG performance. The author formally justifies the relationship between organisational learning and ESG performance (i.e., positive, negative, or neutral). In most cases, organisational learning helps organisations to achieve ESG strategy. Secondly, the researcher has analyzed how organisational learning affects ESG performance. Relying on multiple strategies and assumptions (single-loop learning), values, and norms (double-loop learning), organisations may achieve different ESG consequences. In summary, the researcher found that the adoption of strategies and assumptions (single-loop learning) is influenced by the process in an organisation, while the adoption of values and norms (double-loop learning) is decided by the roles of people in an organisation.

5.1. Process

There are 87 different single-loop learning processes in the 57 records. The researcher identified four categories of processes including internal management, external management, external and internal management, and governance, accounting for 62.92%, 13.48%, 10.11%, and 13.48%, respectively. Figure 5 shows the breakdown of articles by management process in an organisation, which manifests that there was a significant positive correlation between internal management and single-loop learning. In the internal management sector, there are 12 discriminative processes including control system (1.79%), culture (5.36%), decision-making (33.93%), digitisation (1.79%), ethics (3.57%), gender balance (3.57%), human resource management (3.57%), knowledge management (25.00%), risk management (5.36%), structure (3.57%), technology (1.79%), and training (10.71%). It provides evidence that decision-making, knowledge management, and training could help an organisation to achieve single-loop learning to enable the ESG strategy. Still, there are six distinguishable processes in the external management, including politics (8.33%), assurance (8.33%), environment (16.67%), media (16.67%), policy (41.67%), and social (8.33%). It indicates that policy is crucially important for single-loop learning related to ESG performance. Together, these results provide important insights into single-loop learning which is the main factor influencing the process of organisational learning related to ESG.

5.2. People

There are 12 different double-loop learning processes in the 57 records, from which the researcher identified that entrepreneurs, managers, practitioners, professionals, and TMT dominated the values and norms of an organisation. TMT and managers account for the highest proportion, which is 33% separately and 66% in total. Figure 6 shows the breakdown of articles by roles of people in an organisation, which indicates that TMT and managers in the double-looping are the main factors influencing the process of organisational learning related to ESG. According to upper-echelons theory, managers have to mainly rely on their own personalised interpretations of the strategic environment during the strategic decision-making process under a dynamic environment and thus the managers [75]. As a result, values and norms (double-loop learning) are reflections of the values and cognitive bases of powerful actors in the organisations and each decision maker brings his or her own set of ‘givens’ to an administrative situation including the knowledge or assumptions about future events, knowledge of alternatives, and knowledge of consequences attached to alternatives [76].

5.3. Strengths and Limitations

Our findings advance the prior literature in several ways. First, the topic of ESG and organisational learning is a relatively new field. More than 70% of the reviewed articles were published in the year 2018, 2019, 2020, and 2021, which illustrates the novelty of this subject. The first article about ESG on organisational learning was published in 2012 [77], although the ESG concept was really new at that time, the article analyzing the relations between a French mutual bank and its member, developing suitable communications and strategies for each group, with the goal of strengthening their corporate and social engagement, while of course maintaining overall consistency. Secondly, the effectiveness of organisational learning on ESG has been identified in empirical studies in all the reviewed articles. However, previous studies have not been systematically mapped. The research findings contribute to associating organisational learning with ESG from a holistic perspective through different learning loops. So, thirdly, the conceptual framework of two learning loops could serve as a springboard for scholars to plan for future research on organisational learning related to ESG, such as single-loop learning including the process (i.e., control system, decision-making, ethics, gender balance, human resource management, knowledge management, risk management, and training), and double-loop learning including the key persons (i.e., practitioners, professionals, managers, and the top management team), in order to transfer strategies and assumptions of values and norms.

This systematic review presents some limitations. Firstly, the extant organisational learning theories and learning loops used by researcher on ESG, such as single- and double-learning loops [9], and learning effectiveness [64], were developed based on prevailing empirical studies conducted mostly in western contexts, which might have a cultural bias [78,79]. Secondly, this study concerns the research areas that focus on business economics, behavioural sciences, operations research, or management science. However, other research areas regarding organisational learning on ESG performance remain unknown. Regarding the methodology of identifying and analyzing the research question of how organisational learning affects ESG consequences, this study employed the inductive reasoning method to define the relationship between organisational learning and ESG performance through qualitative analysis. Quantitative methods with a bigger sample size are needed to test the proposed research framework in further studies.

5.4. Future Research and Implications

The findings of this research provide the first comprehensive assessment of the relationship between organisational learning and ESG. This research also highlights the importance of the effect of organisational learning on ESG performance, which lies in the overlooked and hidden extant studies. Theoretically, the review has indicated significant implications for understanding of the relationship between organisational learning and ESG (integration with strategies and operations). Regarding the learning loops discussed in this study, the main results indicated that integrating theories relate to ‘2P’ (people and process) is vital to a better understanding of the complexity of the liaison between organisational learning and ESG performance. Furthermore, these findings have significant implications that could help entrepreneurs, managers, TMTs, practitioners, and policymakers to leverage the organisational learning related to ESG and improve the environmental development for organisational learning in response to the COVID-19 pandemic threats under multitudinous cultural contexts. Combining the insights yielded by our systematic review, the present study provides avenues and lays the groundwork for future research into two main directions.

First, conduct more empirical case studies using quantitative and qualitative research methods to implement investigation of key drivers of organisational learning related to ESG performance, especially the analysis of how to transfer the single-loop learning (strategies and assumptions) to double-loop learning (values and norms) at multiple organisational levels including organisational, group, and individual. The single-loop learning has drawn much attention in most western countries and regions over the past 20 years (2001–2021) (e.g., [80,81,82]). More research on organisational learning related to ESG in the oriental context, especially the developing countries such as China and India, is urgent to avoid potential cultural bias. The number of factors related to single-loop learning is significantly higher than that of double-loop learning. This might be because organisations are easier to change processes than the subjective consciousness of key persons, giving rise to single-loop learning rather than double-loop learning. However, the results of this systematic review demonstrate the complexity of processes while single-loop learning needs a different level of facilitating and support in a different sociocultural environment. Future studies could further explore the link between the attributes of organisational process flow and organisational learning related to ESG.

The findings of this research indicate that organisational learning related to ESG drew attention very early in 2012 [83], and this factor was identified extensively in the later research. These factors belong to processes in organisations during single-loop learning. However, there are still many problems that were not explained clearly in the existing empirical studies. For example, it remains ambiguous about how single-loop learning (strategies and assumptions) is transformed into double-loop learning (values and norms) at multiple organisational levels including organisational, group, and individual. Future studies could explore more links between single-loop learning and double-loop learning related to ESG.

Second, conduct more testing and validation of further investigation into the variables of ‘2P’ (people and process) in the proposed conceptual research framework, including managers and TMTs, knowledge management, decision-making, and governance, especially about the characteristics of the upper echelons, including TMT’s age, functional tracks, other career experience, education, socioeconomic roots, financial position, and group characteristics, which are observable [76]. The following ‘PPT’ (people, process, and technology) approaches showed in Figure 7 could be considered to implement future testing and validation. The studies included in this systematic literature review argue that double-loop learning related to ESG is determined by roles of people such as TMTs and managers, because they dominated values and norms. However, TMTs and managers exhibited defensive reasoning mindsets to defend their actions and policies [84], which was not investigated in much detail. Maybe further studies could use the HeXie management theory to reduce the defensive reasoning mindset and defensive routines, as the He principle of HeXie management theory entails an evolutionary perspective regarding utilising the uncertainty arising from unpredictable human activity and emphasises self-discipline and induces initiative and positivity of individuals [85]. Moreover, various studies included in this review argue that single-loop learning related to ESG is embodied in processes in organisations such as decision-making and knowledge management. However, the studies of organisations to enlighten the work of practitioners with a more instrumental and comprehensive view were not taken into consideration. Concerning the strategic process of organisational learning, the systematic approaches such as knowledge repositories, postmortem evaluations, communities of practice, cross-functional teams, research and development, and training, which offer practical guidance on the implementation of organisational learning as well as evaluability and comparability, could contribute new insights from different perspectives. Furthermore, the reviewed studies were mostly based on perspectives of ‘2P’ (people and process). Future research could involve technology approaches, such as knowledge repositories and virtual worlds. Organisations may take advantage of a knowledge system integrating with different repositories and supporting knowledge management processes [49]. In addition, this research mainly conducted a quantitative model test in the empirical study of this systematic review, which provides valuable knowledge about the validation of the existing theories. However, this also requires employing qualitative, grounded, longitudinal, and process case study designs.

6. Conclusions

This systematic review of organisational learning and ESG performance provides the first comprehensive assessment of the relationship between the two domains. The contribution of this study has confirmed that organisational learning is instrumental in driving ESG performance. The findings shed new light on the effect of single and double-loop learning related to ESG, which lies in the overlooked and hidden extant studies. This research establishes a framework from a holistic perspective through different learning loops to better facilitate the ESG strategy through ‘2P’ (people and process). Single-loop learning (process) includes the control system, decision-making, ethics, gender balance, human resource management, knowledge management, risk management, and training. Double-loop learning (people) includes practitioners, professionals, managers, and the top management teams. The two learning loops play a major role in influencing ESG performance. This would be a fruitful area for further work. The ‘PPT’ (people, process, and technology) approach is also designed for future research to identify the underlying contradictions and to develop organisational learning to achieve ESG strategy and improve ESG performance.