Evolution of Carbon Footprint Data in ESG Investing: A Literature Trace from Voluntary Disclosure to Mandatory Compliance

Carbon footprint data has evolved from a marginal corporate social responsibility (CSR) indicator to a core factor in ESG (Environmental, Social, Governance) investment decisions over the past two decades. This paper traces the evolutionary trajectory of carbon footprint data application in ESG investing through a systematic literature review, identifying three distinct phases: the embryonic phase (2000–2010), institutionalization phase (2011–2020), and mandatory compliance & standard convergence phase (2021–present). By analyzing Web of Science, and other databases (2000–2025), it explores how disclosure mechanisms-voluntary versus mandatory-have shaped investor behavior, capital allocation, and market dynamics. Theoretically, it integrates information asymmetry theory, institutional change theory, and signaling theory to explain shifts in stakeholder responses. Practically, it compares regulatory impacts in the EU, U.S., and China, highlighting lessons for policymakers, investors, and corporations. The findings reveal that institutional design of disclosure rules directly influences the reliability of carbon data and its utility in sustainable investment strategies, with mandatory frameworks significantly improving data comparability and accelerating capital reallocation toward low-carbon assets.