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ESG and Industry 5.0: The role of technologies in enhancing ESG disclosure

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  • Asif, Muhammad
  • Searcy, Cory
  • Castka, Pavel

Abstract

Environmental, social, and governance (ESG) is increasingly being used to evaluate the performance of firms and pension funds, guide investment decision-making, and inform customer purchasing. Research on ESG is still evolving. Although a few studies have investigated the role of individual technologies (e.g., blockchain) in ESG, applying a broader set of emerging technologies in improving ESG disclosure and addressing its limitations is yet to be explored. Industry 5.0 offers a powerful framework for understanding the role of technologies in enhancing ESG disclosure. This conceptual paper explains ESG from the lens of management theories and views, including stakeholder theory, legitimacy theory, transaction cost economics theory, institutional theory, signaling theory, network economics theory, and the decoupling view. It then explores the application of I5.0 in enhancing ESG disclosure. The underlying values of I5.0 align with those of ESG, and I5.0 can support ESG functionalities. I5.0 is particularly useful in enhancing ESG disclosure authenticity, extending ESG disclosure from retrospective to prospective and real-time reporting, customizing ESG reports, extending the scope of reporting to multi-tier supply chains, reducing ESG cost, and enhancing the overall efficacy of ESG disclosure. The paper also sheds light on governance aspects, challenges, and risks of employing I5.0 to ESG.

Suggested Citation

  • Asif, Muhammad & Searcy, Cory & Castka, Pavel, 2023. "ESG and Industry 5.0: The role of technologies in enhancing ESG disclosure," Technological Forecasting and Social Change, Elsevier, vol. 195(C).
    • Handle: RePEc:eee:tefoso:v:195:y:2023:i:c:s0040162523004912
    DOI: 10.1016/j.techfore.2023.122806
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