IDEAS home Printed from https://ideas.repec.org/a/fst/rfsisf/v15y2023i8p144-158.html
   My bibliography  Save this article

Navigating the ESG Landscape and Its Impact in the Business and Investment Sector

Author

Listed:
  • Andreea Larisa Olteanu (Burcă)

    (The Bucharest University of Economic Studies, Bucharest, Romania)

  • Alina Elena Ionașcu

    (Ovidius University of Economic Studies, Constanta, Romania)

Abstract

The purpose of this paper is to identify the impact and importance of ESG in the business and investment world in the past few years and how can we implement ESG criteria into our businesses to continue to have profitable and investable businesses. The research is focused on the role of ESG decisions within organizations and how they can impact the value of a company. The research hypothesis is that there are various decisions of becoming ESG complaint you can take, but not all of them are profitable decisions. So, instead of taking decisions based on the implementing costs and short-term expenses, an organization should take into consideration long-term profits and a possible increase in the company’s valuation. Achieving success involves identifying these factors well in advance before they can adversely impact the well-being of the company. This allows for proactive measures to mitigate any potential detrimental consequences that may arise. This can be accomplished through ongoing monitoring of these variables, creating a dynamic process, and making informed decisions based on a solid understanding of the operational processes and needs of each company. Because of its massive politicization, ESG has become perceived more as a cost center instead of a value center. Business leaders consider that they are being forced to report something without value for their businesses when they should be asked how to turn this in their favor to make business more valuable. This paper also presents the importance of sustainable developments and how they can impact investment decisions. Analyzing the behavior of the biggest investment firms, we can identify those metrics that show if a company’s decisions about ESG implementation make it investment material.

Suggested Citation

  • Andreea Larisa Olteanu (Burcă) & Alina Elena Ionașcu, 2023. "Navigating the ESG Landscape and Its Impact in the Business and Investment Sector," Journal of Financial Studies, Institute of Financial Studies, vol. 15(8), pages 144-158, November.
    • Handle: RePEc:fst:rfsisf:v:15:y:2023:i:8:p:144-158
    DOI: 10.55654/JFS.2023.8.15.09
    as

    Download full text from publisher

    File URL: https://revista.isfin.ro/wp-content/uploads/2023/11/9.-Olteanu-Andreea.pdf
    Download Restriction: no
    File URL: https://revista.isfin.ro/2023/11/28/navigating-the-esg-landscape-and-its-impact-in-the-business-and-investment-sector/
    Download Restriction: no
    File URL: https://libkey.io/10.55654/JFS.2023.8.15.09?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Pástor, Ľuboš & Stambaugh, Robert F. & Taylor, Lucian A., 2021. "Sustainable investing in equilibrium," Journal of Financial Economics, Elsevier, vol. 142(2), pages 550-571.
    2. Edmans, Alex, 2011. "Does the stock market fully value intangibles? Employee satisfaction and equity prices," Journal of Financial Economics, Elsevier, vol. 101(3), pages 621-640, September.
    3. Vismara, Silvio, 2019. "Sustainability in equity crowdfunding," Technological Forecasting and Social Change, Elsevier, vol. 141(C), pages 98-106.
    4. Cumming, Douglas & Henriques, Irene & Sadorsky, Perry, 2016. "‘Cleantech’ venture capital around the world," International Review of Financial Analysis, Elsevier, vol. 44(C), pages 86-97.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:fst:rfsisf:v:8:y:2023:i:15:p:144-158 is not listed on IDEAS
    2. Drobetz, Wolfgang & El Ghoul, Sadok & Guedhami, Omrane & Hackmann, Jan P. & Momtaz, Paul P., 2024. "Entrepreneurial finance and sustainability: Do institutional investors impact the ESG performance of SMEs?," Journal of Business Venturing Insights, Elsevier, vol. 22(C).
    3. Mansouri, Sasan & Momtaz, Paul P., 2022. "Financing sustainable entrepreneurship: ESG measurement, valuation, and performance," Journal of Business Venturing, Elsevier, vol. 37(6).
    4. Ekaterina O. Vostrikova & Anna P. Meshkova, 2020. "ESG Criteria in Investment: Foreign and Russian Experience," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 4, pages 117-129, August.
    5. Lars Hornuf & Gül Yüksel, 2022. "The Performance of Socially Responsible Investments: A Meta-Analysis," CESifo Working Paper Series 9724, CESifo.
    6. Pástor, Ľuboš & Stambaugh, Robert F. & Taylor, Lucian A., 2022. "Dissecting green returns," Journal of Financial Economics, Elsevier, vol. 146(2), pages 403-424.
    7. Gillan, Stuart L. & Koch, Andrew & Starks, Laura T., 2021. "Firms and social responsibility: A review of ESG and CSR research in corporate finance," Journal of Corporate Finance, Elsevier, vol. 66(C).
    8. Ilaria Piatti & Joel Shapiro & Xuan Wang, 2023. "Sustainable Investing and Public Goods Provision," Working Papers 969, Queen Mary University of London, School of Economics and Finance.
    9. Lioui, Abraham & Tarelli, Andrea, 2022. "Chasing the ESG factor," Journal of Banking & Finance, Elsevier, vol. 139(C).
    10. Qinglan Wu & Guifu Chen & Jing Han & Liyan Wu, 2022. "Does Corporate ESG Performance Improve Export Intensity? Evidence from Chinese Listed Firms," Sustainability, MDPI, vol. 14(20), pages 1-16, October.
    11. Yuwen Dai, 2025. "Sustainable investing in emerging markets: Evidence from the Sustainable Stock Exchanges initiative," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 2001-2015, April.
    12. Chi Zhang & Xinyang Li & Andrea Tamoni & Misha Beek & Andrew Ang, 2024. "ESG risk and returns implied by demand-based asset pricing models," Journal of Asset Management, Palgrave Macmillan, vol. 25(3), pages 203-221, May.
    13. Alice Monti & Pierpaolo Pattitoni & Barbara Petracci & Otto Randl, 2022. "Does corporate social responsibility impact equity risk? International evidence," Review of Quantitative Finance and Accounting, Springer, vol. 59(3), pages 825-855, October.
    14. Avramov, Doron & Cheng, Si & Lioui, Abraham & Tarelli, Andrea, 2022. "Sustainable investing with ESG rating uncertainty," Journal of Financial Economics, Elsevier, vol. 145(2), pages 642-664.
    15. Zhou, Zihan & Wang, Shaolin & Wang, Hongxia, 2025. "The performance of ESG portfolios: A stochastic dominance approach," Finance Research Letters, Elsevier, vol. 72(C).
    16. Cheng, Louis T.W. & Cheong, Tsun Se & Wojewodzki, Michal & Chui, David, 2025. "The effect of ESG divergence on the financial performance of Hong Kong-listed firms: An artificial neural network approach," Research in International Business and Finance, Elsevier, vol. 73(PA).
    17. Pedersen, Lasse Heje & Fitzgibbons, Shaun & Pomorski, Lukasz, 2021. "Responsible investing: The ESG-efficient frontier," Journal of Financial Economics, Elsevier, vol. 142(2), pages 572-597.
    18. Vu, Thanh Nam & Lehkonen, Heikki & Junttila, Juha-Pekka & Lucey, Brian, 2025. "ESG investment performance and global attention to sustainability," The North American Journal of Economics and Finance, Elsevier, vol. 75(PA).
    19. Gallucci, Carmen & Santulli, Rosalia & Lagasio, Valentina, 2022. "The conceptualization of environmental, social and governance risks in portfolio studies A systematic literature review," Socio-Economic Planning Sciences, Elsevier, vol. 84(C).
    20. Griffin, Dale & Guedhami, Omrane & Li, Kai & Lu, Guangli, 2021. "National culture and the valueto implications of corporate environmental and social performance," Journal of Corporate Finance, Elsevier, vol. 71(C).
    21. Mayank Joshipura & Sachin Mathur & Nikita Kedia, 2024. "Sustainable investing and financing for sustainable development: A hybrid review," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(5), pages 4469-4485, October.

    More about this item

    Keywords

    ESG; investment; business; value chain; sustainable development.;
    All these keywords.

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fst:rfsisf:v:15:y:2023:i:8:p:144-158. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Cosmin Catalin Olteanu (email available below). General contact details of provider: https://edirc.repec.org/data/isfinro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.