ESG Investing for Sustainable Business: Exploring the Future

Dear Colleagues,

The increasing popularity of ESG (environmental, social, and governance) criteria in business reflects the evolving nature of the connections between corporations and the various societies in which they operate as well as the evolving nature of concerns related to corporate activities. ESG disclosure offers companies considerable opportunities to enhance their influence and reputation and reinforce public interest safeguards. The growing interest and influence of ESG are reflected in the need for more and better disclosures of ESG-related information. The current ESG information infrastructure, comprising, for the most part, voluntary disclosures supplemented by a growing number of proprietary databases and ratings, is seen as lacking in both quality and comparability. As such, the spotlight on environmental, social, and governance (ESG) metrics has grown considerably, partly because of increasing shareholder and stakeholder interest in sustainable business practices. Using ESG performance ratings alongside more traditional fundamental analysis has increased acceptance to promote a firm's better recognition of long-term risks and opportunities.

Given the importance of this topic, the aim of this journal issue is to provide complete reporting of the latest research concerning ESG investing and sustainable business. Examining such trends is an endeavour to create a significant and positive influence on sustainability and ESG investing by showing the various impacts of ESG investing on sustainability. This Special Issue will raise the consciousness of readers regarding ESG investing, its effects on sustainability, and its consistent consequences for the business domain. Accordingly, this Special Issue seeks to be a relevant contribution to the ESG research field, delivering remarkable impact and benefits for all related and interested parties.

Analysis of the existing literature concerning this field suggests a lack of systematic research within this area. This gap in the literature is surprising from several perspectives. First, the significance of the relationship between business and society for the world's largest companies is well recognized, and indeed, the relationship between companies and their stakeholders is a central theme both in corporate governance and in financial analysis, affecting, in particular, the valuation of companies. Second, other specialized groups of investors, such as private equity investors, have long argued that they can influence the performance of investee companies, materially improve their performance and, therefore, their stakeholder value. Third, governments have more recently become interested in the ability of listed companies to contribute to broader social objectives, partially stimulated by corporate lobbying over regulatory burdens, and have used such sentiments to grant listed companies favourable treatment in areas such as access to public pension fund capital. More surprisingly, there is a relatively thin direct exploration of the patterns and determinants of ESG performance that relate businesses to these broader social outcomes, particularly at the level of individual companies. Apart from studies examining the links with corporate social responsibility (CSR) more generally, relatively little is known about the specific contributions of the different dimensions—environmental, social, and governance—of business to society and, in turn, the impact of society on business. As such, it is clear that there is a real need to inspire additional investigations to provide additional related knowledge that will help to overcome existing gaps in this research area. 

Conseqeuntly, this SI will provide a base for the investigation of numerous serious research issues, tendencies, progresses, and subjects that signify essential gaps in the field. Accordingly, the SI will provide good coverage of topics that are related, but not limited, to ESG investing and performance impact on sustainability, sustainable behaviour, changes in business practices, ESG  reporting trends, green and socially responsible projects, etc.

Dr. Hatem El-Gohary
Prof. Dr. David John Edwards
Dr. Syed Mohsin Ali Shah
Guest Editors

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