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Environmental, Social, and Governance Integration into the Business Model: Literature Review and Research Agenda

Author

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  • Alaa Aldowaish

    (Graduate School of Media and Governance, Shonan Fujisawa Campus, Keio University, Fujisawa 252-0882, Japan)

  • Jiro Kokuryo

    (Graduate School of Media and Governance, Shonan Fujisawa Campus, Keio University, Fujisawa 252-0882, Japan)

  • Othman Almazyad

    (Department of Business Administration, School of Political Science and Economics, Shonan Campus, Tokai University, Hiratsuka 259-1292, Japan)

  • Hoe Chin Goi

    (NUCB Business School, Nagoya University of Commerce and Business, Nagoya 460-0003, Japan)

Abstract

Environmental, social, and governance (ESG) integration as a socially responsible investment (SRI) from a financial perspective has been discussed extensively. However, few studies discuss its impact on firms’ internal operations from the perspective of sustainable development (SD). This study aims to examine the integration of ESG into the currently prevailing business model. Twenty-nine studies were systematically reviewed. Our analysis used an input–process–output model to identify the integration process and the outcomes. The findings show that only two papers explain the implementation steps or transition process of ESG integration, while 27 papers discuss ESG integration as an outcome, including integration behaviors, advantages, practices, and critical views. Our research aims to highlight that firms adopt ESG as a response to pressure from financial markets rather than as a serious effort to integrate sustainability into their core operations. We state the need for more research into the integration process to motivate firms to reform their business models, foster sustainability, and enhance financial performance.

Suggested Citation

  • Alaa Aldowaish & Jiro Kokuryo & Othman Almazyad & Hoe Chin Goi, 2022. "Environmental, Social, and Governance Integration into the Business Model: Literature Review and Research Agenda," Sustainability, MDPI, vol. 14(5), pages 1-20, March.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:5:p:2959-:d:763244
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    5. Ana Gabriela Ramirez & Julián Monsalve & Juan David González-Ruiz & Paula Almonacid & Alejandro Peña, 2022. "Relationship between the Cost of Capital and Environmental, Social, and Governance Scores: Evidence from Latin America," Sustainability, MDPI, vol. 14(9), pages 1-15, April.
    6. Obey Dzomonda, 2022. "Environmental Sustainability Commitment and Access to Finance by Small and Medium Enterprises: The Role of Financial Performance and Corporate Governance," Sustainability, MDPI, vol. 14(14), pages 1-20, July.
    7. Magdalena Zioło & Iwona Bąk & Anna Spoz, 2023. "Incorporating ESG Risk in Companies’ Business Models: State of Research and Energy Sector Case Studies," Energies, MDPI, vol. 16(4), pages 1-25, February.
    8. Catalin Popescu & Eglantina Hysa & Alba Kruja & Egla Mansi, 2022. "Social Innovation, Circularity and Energy Transition for Environmental, Social and Governance (ESG) Practices—A Comprehensive Review," Energies, MDPI, vol. 15(23), pages 1-28, November.
    9. Anrafel Souza Barbosa & Maria Cristina Basilio Crispim Silva & Luiz Bueno Silva & Sandra Naomi Morioka & Vinícius Fernandes Souza, 2023. "Integration of Environmental, Social, and Governance (ESG) criteria: their impacts on corporate sustainability performance," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-18, December.
    10. Huiying Zhang & Xiguang Chen, 2022. "Open Innovation and Sustainable Innovation Performance: The Moderating Role of IP Strategic Planning and IP Operation," Sustainability, MDPI, vol. 14(14), pages 1-15, July.

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