ESG and Sustainability Finance: Addressing Climate Change and Climate Risk

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Energy and Environment: Economics, Finance and Policy".

Deadline for manuscript submissions: 31 December 2025 | Viewed by 1888

Special Issue Editors


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Guest Editor
Department of Economics and Finance, Unversity of Texas at El Paso, El Paso, TX 79958, USA
Interests: commercial real estate; real estate; corporate finance; ESG
School of Management, Chinese Academy of Housing and Real Estate, Zhejiang University of Technology, 288 Liuhe Road, Xihu District, Hangzhou 310014, China
Interests: housing economics; urban economics; entrepreneurship
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Special Issue Information

Dear Colleagues,

The concepts of Environmental, Social, and Governance (ESG) and Sustainability are rapidly transforming financial research and practice. ESG factors are now integral to corporate strategy, investment decisions, and regulatory frameworks, fostering long-term value, mitigating risks, and promoting societal well-being. However, ESG integration also presents challenges such as greenwashing, inconsistent disclosures, and debates over financial payoffs. There is a pressing need for comprehensive research that examines both the benefits and downsides of ESG in financial markets and business operations, particularly in the context of climate change, climate risk, and natural disasters.

The Journal of Risk and Financial Management invites submissions for a Special Issue on “Environmental, Social, and Governance (ESG) and Sustainability Finance: Addressing Climate Change, Climate Risk, and Natural Disasters”. We seek high-quality theoretical, empirical, and methodological studies that advance our understanding of ESG integration in finance with a focus on climate-related challenges. The topics of interest include, but are not limited to, the following:

  • ESG Disclosure, Performance, and Financial Outcomes: Impact of ESG disclosure and performance on corporate financial results and potential payoffs;
  • ESG Risk Assessment and Management: Strategies for assessing and managing ESG-related risks, including those related to climate change and natural disasters, in investment portfolios;
  • Comparative ESG Practices: Analysis of ESG implementation across different industries and regions, with an emphasis on climate resilience;
  • Green Finance and Sustainable Investments: Role of ESG in advancing green finance initiatives and sustainable investment strategies aimed at mitigating climate impact;
  • ESG Reporting Standards and Regulations: Examination of ESG reporting standards, regulatory frameworks, and their implications for climate risk management;
  • Behavioral Finance and ESG Investing: Insights into investor behavior and decision making in ESG investments, particularly in response to climate-related information;
  • ESG and Financial Stability: Influence of ESG factors, especially climate risks, on financial stability and market resilience;
  • Corporate Sustainability Strategies: Best practices for enhancing corporate sustainability and climate resilience in diverse economic environments;
  • Downsides of ESG: Issues such as greenwashing, inconsistent ESG disclosure, and debates over the actual financial benefits of ESG integration, with a focus on climate-related aspects.

Submissions should address significant challenges and propose innovative solutions at the intersection of ESG, sustainability, and finance, particularly in relation to climate change and the associated risks. Both theoretical insights and practical applications are encouraged.

Dr. Zifeng Feng
Dr. Mingzhi Hu
Guest Editors

Manuscript Submission Information

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Keywords

  • environmental, social, and governance ESG
  • performance ESG
  • disclosure ESG
  • payoff financial stability and ESG
  • sustainability
  • sustainable investing
  • corporate sustainability
  • green finance
  • greenwashing
  • climate change
  • climate risk
  • natural disasters

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Published Papers (1 paper)

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Research

24 pages, 791 KB  
Article
Herding Behavior, ESG Disclosure, and Financial Performance: Rethinking Sustainability Reporting to Address Climate-Related Risks in ASEAN Firms
by Ari Warokka, Jong Kyun Woo and Aina Zatil Aqmar
J. Risk Financial Manag. 2025, 18(8), 457; https://doi.org/10.3390/jrfm18080457 - 16 Aug 2025
Viewed by 941
Abstract
This study examines the intersection of environmental, social, and governance (ESG) disclosure (operationalized through sustainability reporting), corporate financial performance, and the behavioral dynamics of herding in capital structure decisions among non-financial firms in five ASEAN countries. As ESG and sustainability finance gain prominence [...] Read more.
This study examines the intersection of environmental, social, and governance (ESG) disclosure (operationalized through sustainability reporting), corporate financial performance, and the behavioral dynamics of herding in capital structure decisions among non-financial firms in five ASEAN countries. As ESG and sustainability finance gain prominence in addressing climate change and climate risk, understanding the behavioral factors that relate to ESG adoption is crucial. Employing a quantitative approach, this research utilizes a purposive sample of 125 non-financial firms from Indonesia, Malaysia, the Philippines, Singapore, and Thailand, gathered from the Bloomberg Terminal spanning 2018–2023. Managerial Herding Ratio (MHR) is used to assess herding behavior, while Sustainability Report Disclosure Index (SRDI) measures ESG disclosure. Partial Least Squares Structural Equation Modeling (PLS-SEM) and Multigroup Analysis (MGA) were applied for data analysis. This research finds that while sustainability reporting enhances return on assets (ROA) and Tobin’s Q, it does not significantly relate to net profit margin (NPM). The findings also confirm that herding behavior—where companies mimic the financial structures of peers—moderates the relationship between sustainability reporting and performance outcomes, with leader firms gaining more from transparency efforts. This highlights the double-edged nature of herding: while it can accelerate ESG adoption, it may dilute the strategic depth of climate action if firms merely follow rather than lead. The study provides actionable insights for regulators and corporate strategists seeking to strengthen ESG finance as a driver for climate resilience and long-term stakeholder value. Full article
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