What do we know about ESG and risk? A systematic and bibliometric review

Abstract

Environmental, Social and Governance (ESG) issues have become particularly relevant in the agendas of policymakers, investment decisions by companies and asset allocation process of investors. However, the transition to a greener and more sustainable economic system is not without risks. The literature has investigated the relationship between ESG and risk in different ways, through multiple perspectives and approaches. We select all documents with “ESG” and “Risk” in the title, abstracts and keywords available in Scopus and, after removing non‐relevant papers, we are left with a sample of 589 documents published in the period 1983–2022. To provide a view of the most important studies, we also focus on the most cited documents to discuss the methodological approaches and main results. The results show that over time, ESG has gained increasing attention from the literature, but researchers work in isolation and there is no single approach or leading core topic driving academic productivity; a clear taxonomy of ESG risks appears to be missing. To the best of our knowledge, this paper is the first to discuss research on ESG and risk from a financial perspective. The results highlight some existing gaps in the literature that can provide a hint for the development of the topic by researchers. These include a clearer taxonomy of ESG risks that can affect investors' and companies' decisions, a greater effort to evaluate how ESG risks distribute and spill from one sector to another and the inclusion of emerging economies and small and medium‐sized enterprises in the samples.

Data-Driven Sustainable Investment Strategies: Integrating ESG, Financial Data Science, and Time Series Analysis for Alpha Generation

“…This observation aligns with the conclusions drawn in studies such as those mentioned by Cohen (2023) and Gupta et al (2021), which emphasize the impact of ESG factors on financial performance. Furthermore, the results of Hypothesis 3 revealed a significant difference in returns attributable to ESG considerations, aligning with the research by Stiadi (2023) and De Giuli et al (2024), which emphasizes the importance of considering ESG factors in investment decision-making processes. Lastly, Hypothesis 4 explored the presence of a weak negative correlation between certain ESG factors and investment returns, which was supported by the presence of a positive annualized alpha of 4.37%.…”

“…Bibliometric Review of Environmental, Social, andGovernance Factors andRisk De Giuli et al (2024) conduct a bibliometric review, analyzing literature on ESG factors and risk, identifying trends and key research areas. Their study underscores the critical role of finance in promoting sustainable growth and emphasizes the need for further research in understanding ESG risks and their implications for financial markets (De Giuli et al 2024).…”

The Application of Environmental, Social and Governance Standards in Operational Risk Management in SSC in Poland

“…Selection of all documents with "ESG" and "Risk" in the title, abstracts and keywords available in Scopus and, after removing nonrelevant papers, we are left with a sample of 589 documents published in the period 1983-2022, provided a view of the most important studies. The results show that over time, ESG has gained increasing attention from the literature, but a clear taxonomy of ESG risks appears to be missing [48]. The main conclusions concern the usage of keywords related to sustainability and the evolution from "social responsibility" to a more comprehensive term, such as "ESG".…”

“…The main conclusions concern the usage of keywords related to sustainability and the evolution from "social responsibility" to a more comprehensive term, such as "ESG". The research [48] identified several key challenges that companies face when attempting to integrate ESG factors into their decision-making processes, which include a lack of standardized ESG data and metrics, difficulties in identifying material ESG issues, and the need for greater transparency and accountability in ESG reporting. Additionally, the core stream of research investigates the problems of asset managers and companies in terms of how to improve economic or financial metrics through ESG investing.…”

Enterprise risk management and firm performance: The mediating role of corporate social responsibility in the European Union region

“…Previous research has examined the relationship between risk and firm performance (Çamlibel et al, 2021;Soares da Fonseca, 2020), as well as the potential impact of ERM on firm performance (Arnold et al, 2015;Farrell & Gallagher, 2015). Prior studies have also explored the relationship between risk and CSR (Bouslah et al, 2018;Cupriak et al, 2020;De Giuli et al, 2024;Hummel et al, 2021) and the relationship between ERM and CSR and its impact on performance (Chairani & Siregar, 2021;Naseem et al, 2020). However, a more thorough understanding of these relationships is necessary, especially in terms of ERM implementation and its alignment with a company's strategic dimensions, particularly CSR.…”