Environmental, social and governance investing: systematic literature review using ADO model

Abstract

Purpose This paper systematically analyzes the literature on environmental, social and governance (ESG). It explores the antecedents, decisions and outcomes (ADO) influencing ESG investments; theories used in the literature; publication years, geographical locations and journals of publication of ESG-related articles; notable gaps in research on ESG investments; theoretical and managerial implications and prospective research avenues within the ESG field. All ESG components are interconnected with the United Nations’ Sustainable Development Goals (SDGs). Design/methodology/approach The PRISMA framework was employed to screen articles from the Scopus database. A total of 386 articles spanning 2011–2024 were included. The search terms used to screen the articles for inclusion were “sustainable finance,” “ESG,” “environment, social, corporate governance,” “green finance,” “green bond,” “social bond,” “blue bond,” “social finance” and “corporate social responsibility.” Findings The findings indicate that organizations utilize green bonds, blue bonds and green loans to mitigate environmental concerns. To address social issues, companies issue social bonds and sustainable bonds and engage in socially responsible investing. To address concerns about corporate governance, companies emphasize corporate social responsibility and intellectual capital. Practical implications The findings can be used to inform policymakers on the implementation of comprehensive regulatory frameworks in the realm of ESG. Tax benefits and subsidies should be extended to firms fostering ESG practices. Originality/value This study offers a comprehensive synthesis of the ESG literature by examining the ADO framework, which has not been systematically applied to ESG investments before. It integrates diverse components of ESG investments with the United Nations’ SDGs, providing a unique perspective on how these investments align with global sustainability objectives.

Keywords ESG, Sustainable development goals, ADO model, Sustainable finance