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An integrated theory of the firm approach to environmental, social and governance performance

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  • Danny Zhao‐Xiang Huang

Abstract

The literature seeking to explain why firms conduct environmental, social and governance (ESG) activity is substantial and growing but remains underdeveloped. This paper offers a holistic and multi‐disciplinary theoretical framework to situate ESG activity as integral to firm performance. Drawing on established theories of the firm, these theories together assist the firm identify salient stakeholders, and how their contributions and claims may be integrated into firm activity. This approach places ESG considerations as an important element of firm activity in terms of developing and maintaining a firm’s social licence, the way it manages risks, and building competitive advantage.

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  • Danny Zhao‐Xiang Huang, 2022. "An integrated theory of the firm approach to environmental, social and governance performance," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(S1), pages 1567-1598, April.
    • Handle: RePEc:bla:acctfi:v:62:y:2022:i:s1:p:1567-1598
    DOI: 10.1111/acfi.12832
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