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Sustainability, Governance And Capital: Realities And Risks In The Esg Era

Author

Listed:
  • Alexandru BAGOSI

    (University of Oradea, Doctoral School of Economic Sciences, Business Administration Field, Oradea, Romania)

Abstract

The introduction of Environmental, Social, and Governance (ESG) principles by the United Nations in 2004 marked a pivotal moment in global sustainability efforts, prompting widespread adoption of ESG frameworks within the corporate and investment sectors. ESG investing, which blends financial goals with sustainable values, has gained significant traction, driving innovations in financial products such as green bonds and ESG indices. This shift in investment strategies aligns with the United Nations' Sustainable Development Goals (SDGs) and is reshaping global markets, notably through exchanges like the Eurex Exchange, which launched ESG-focused financial products in response to rising demand. However, the ESG landscape is not without challenges. The lack of a universally accepted definition and the presence of competing ratings systems contribute to confusion and the potential for deceptive practices like greenwashing. Despite these issues, ESG investments continue to grow rapidly, fostering transparency and sustainability practices while posing risks related to unclear performance outcomes. Sustainability management at the company level includes not only environmental impacts but also social and governance dimensions, with strong reputational benefits for firms adopting comprehensive ESG strategies. By addressing interconnected environmental, social, and economic issues, businesses can foster competitive advantage, gain market trust, and contribute to a more sustainable future.

Suggested Citation

  • Alexandru BAGOSI, 2025. "Sustainability, Governance And Capital: Realities And Risks In The Esg Era," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 34(1), pages 592-598, July.
    • Handle: RePEc:ora:journl:v:34:y:2025:i:1:p:592-598
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    References listed on IDEAS

    as
    1. Kanamura, Takashi, 2025. "Sustainability arbitrage pricing of ESG derivatives," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    2. 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.
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    More about this item

    Keywords

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    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • E71 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy

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