Examining the Impact of ESG on Organizational Performance: The Literature Review on Investment Sectors of the Middle East and North Africa (MENA)

Abstract

ESG pertains to integrating environmental, social, and governance concerns into the operations of corporations and investors. The integrated and collective impact of ESG practices on value creation and sustainability for all stakeholders is considered in every available investigation into ESG performance. However, to make more informed ESG investment decisions, it is necessary to comprehend how different ESG components influence value creation for organizations. The Middle East and Northern Africa (MENA) region mostly consists of countries that have abundant natural resources. ESG implementation in the MENA investment sector would likely be influential in boosting its economic growth. In MENA, more research needs to be performed to highlight the significance of ESG in boosting the financial development of the investment sectors. This literature review has highlighted the research papers, reports, and articles from 2019 to 2023 that depicted the ESG growth in the investment sector by emphasizing the examples of the MENA region and the international market. The literature review has shed light on the role and trend of ESG in MENA investment sectors. Further, it comprehensively discussed the ESG financial stability, ESG implementation barriers, and opportunities, ESG role in risk mitigation, and innovation and employee engagement driven by ESG. This discussion would help the MENA investors and the other organizational bodies make educated decisions before any investment.