2022 Khan

Research in International Business and Finance 61 (2022) 101668
Contents lists available at ScienceDirect
Research in International Business and Finance

journal homepage: www.elsevier.com/locate/ribaf
ESG disclosure and Firm performance: A bibliometric and

meta analysis
Muhammad Arif Khan
Department of Economics and Management, University of Pisa, Italy
A R T I C L E I N F O A B S T R A C T
Jel Classifications: Companies engage in ESG activities in order to achieve higher financial returns and to signal
G30 compliance in the market. The link between ESG and firm financial performance is still not well
G34 established because literature is infused with conflicting results and paradoxes. Through biblio
Q56
metric analysis and meta-analysis, this study attempts to synthesize literature on ESG perfor
Keywords: mance and its impact on performance. Bibliometric analysis highlights top scholars in the field,
ESG
leading journals, institutions, countries, and an overview of highly cited articles in sustainable
Disclosure
finance. This study presents three research streams: (1) Firm characteristics and ESG perfor
Financial materiality
Bibliometric analysis mance, (2) Corporate governance and ESG performance and (3) Financial materiality of ESG
Meta-analysis disclosure. Additionally, I conducted a meta-analysis in which I used random effects models to
compute the effect sizes of each research stream. Finally, research trends and a future research
framework are proposed based on the research gap identified in this review.
1. Introduction
In 2013, the United Nations Global Compact surveyed 1000 chief executive officers (CEOs) around the world. Nearly 93% of the
responding CEOs considered environmental, social, and governance (ESG) related issues essential to their business’ success (UN,
2019). Credit rating agencies are also incorporating ESG factors into their methodology. Recently, these rating agencies have signed
the Principles of Responsible Investment (PRI), pleading their commitment to the inclusion of ESG factors in their credit rating process
(Ferguson et al., 2019). In order to establish a common ground for carbon disclosure and ESG procedures, the European Commission
has committed itself to addressing sustainability issues in the financial sector. The Commission has formed several expert groups
focused on sustainable finance (Commission, 2018).
Companies often perceive ESG related risks to be low probability because they do not face events (such as accidents, lawsuits, or
government intervention into management practices) resulting from a lack of ESG practices in their regular operations. However, firms
must manage it to avoid negative long-term consequences (Henisz and McGlinch, 2019). According to Moody’s, 33% of private sector
issuers consider ESG risk a material credit consideration (Venkataraman and Williams, 2020).
This development of ESG ratings may look like a superficial step, but it is one of the critical reforms in the development of a socially-
responsible business environment. ESG investment is already significant and still growing. Bank of America predicted that $200 trillion
would flow into ESG funds over the next two decades (Stevens, 2019). Rating agencies are paying an increasing amount of attention as
the financial consequences of ESG related risks become clearer. Events like share price drops and bankruptcies resulting from disregard
of ESG risk have already proved the materiality of the ESG indicators.
E-mail address: [email protected].
https://doi.org/10.1016/j.ribaf.2022.101668
Received 10 July 2021; Received in revised form 23 February 2022; Accepted 23 April 2022
Available online 28 April 2022
0275-5319/© 2022 Elsevier B.V. All rights reserved.
M.A. Khan Research in International Business and Finance 61 (2022) 101668
In conclusion, the above discussion indicates that economies are reshaping themselves towards sustainable ones. Businesses are
advised to conduct their operations by taking into account the rights of society and without harming the biosphere. In this regard,
different initiatives are being considered to integrate ESG considerations into business decision-making and integrating reporting is a
key initiative in order to achieve the goal of aligning the value creation activities of the business sector with the Sustainable Devel
opment Goals. (SDG’s).
Although ESG disclosure is widely recognized as an important measure of corporate sustainability, standardization of these dis
closures has not yet been achieved. Different rating agencies provide ESG performance indexes based on different methodologies
(Huber and Comstock, 2017), which may hinder investors’ decision making (Matos et al., 2020) and organizations are just trying to
fulfill the minimum criteria (Lokuwaduge and Heenetigala, 2017). Investors do not currently have access to standardized data that can
be used to identify ESG risks and opportunities.
The European Union is, however, in the process of developing a standardized taxonomy and appropriate measures for sustainable
corporate finance. The EU is planning to tighten its "non-financial reporting directive" in 2021 and it is also likely that the US new
administration will also introduce some updated ESG mandates (Mohin, 2021). Nevertheless, these non-financial disclosures may have
material bearing on key performance indicators. That is why this field has attracted the attention of researchers to theorize the
financial consequences of ESG disclosures (Ahmed et al., 2019; Eccles and Serafeim, 2013; Garcia et al., 2017; Gerwanski, 2020; Siew
et al., 2013; Singal, 2014) and the determinants of ESG disclosure (Bektur and Arzova, 2020; Coluccia et al., 2018; Velte, 2016;
Venturelli et al., 2017).
This empirical literature offers considerable variability which needs to be managed in order to streamline what has already been
done and what needs to be emphasized in future research. In order to fulfill this gap, this study is intended to look into empirical studies
of corporate finance that have used ESG indicators as a proxy for sustainability performance. It is either provided by a third-party
rating agency or based on the content analysis of the company’s financial statements. The study does not include research pertain
ing to socially responsible investments and mutual funds because they are outside the scope of this study.
Several literature reviews have already been conducted. For example, Bartolacci et al. (2020) conducted a systematic literature
review based on bibliographic coupling. They content analyzed the literature which focused only on small and medium-sized en
terprises (SME’s). In a similar study in this domain, Widyawati (2020) conducted a systematic review of literature that sampled socially
responsible funds. There are few meta-analytic studies like Lagasio and Cucari, 2019 conducted a mata analysis of studies on the role of
corporate governance in sustainability reporting. To the extent of my knowledge, this is the first study which conducted a compre
hensive literature review of corporate finance in an ESG context.
This study contributed to the literature on sustainable corporate finance in the following ways. Firstly, it conducts a scientometric
analysis of the sustainable corporate finance literature which highlights the leading authors, journals, institutions, and countries.
Secondly, it explores the conceptual structure of this field and synthesizes the existing literature into dominant research streams, which
are (1) Role of firm characteristics in ESG disclosure, (2) Role of corporate governance in ESG disclosure, and (3) Materiality of ESG
disclosure. Moreover, the study also conducted a meta-analysis and summarizes the empirical findings of the previous literature.
Lastly, the study proposes a future research framework which will be helpful for researchers working in the field of sustainable
corporate finance.
The structure of this paper will proceed as follows; Section 2 discusses the methodological approach used to achieve the purpose of
the study. Section 3 will discuss the results of the study, and Section 4 presents the future research directions highlighted by the most
recent literature followed by conclusion in Section 5.
2. Data and methodology
2.1. Data selection
This study follows three main step data extraction process. The first step includes the choice of a database for data extraction. For
the extraction of data, I use Scopus database, which is an authentic and trustworthy tool for conducting bibliometric analysis; it
searches across publishers and does not imply bias in favor of any specific publisher (Khan et al., 2021; Ding et al., 2016).
López-Illescas et al. (2008) compared the scope of Oncological journals on the Web of Science (WOS) with Scopus and discovered that
Scopus offers a broader coverage of titles.
The second step follows the choice of keywords. Keywords are shortlisted after reviewing the pivotal papers in the field of sus
tainable finance and are finalized after discussion with experts in the area.1 The resulting keywords are "Environmental social and
governance performance", "Environmental social and governance index", "Environmental social and governance ratings", "Environmental social
and governance score", "Corporate social responsibility disclosure", "ESG performance", "ESG index", "ESG ratings", "ESG score", "CSR
disclosure" and searched them in the title, abstract and keywords (coded in Scopus as TITLE-ABS-KEY). This search query yields us total
989 articles published until 2020. Following (Khan et al., 2020; Paltrinieri et al., 2019), I deliberately exclude the articles published in
the year 2021 as these papers still need more citations for their authenticity. Nevertheless, I content analyzed the articles from 2021
and 2022 to encompass all the literature. Further, this study includes only published articles in the English language and belonging to
the areas of Business management, Accounting, Economics, Econometrics, and Finance (Khan et al., 2021).
1 a*
Dr. Maria Pia MaraghiniAssociate professor of accounting and managementUniversity di Sienab* Dr. Kabir HassanProfessor of FinanceUni
versity of New Orleans
2
As a result of the initial search and language/research area filters, I extracted 672 papers published within the period of 2012–2020.
Next, I established an inclusion and exclusion criterion for sorting documents. I set the standard of sustainable finance according to the
EU policy context, which says,
"sustainable finance is understood as finance to support economic growth whereas reducing pressure on the environment and also taking
into account social and governance aspects as well."
The research is designed to include all those documents which use ESG ratings, either provided by third party ESG report providers
or ESG performance measured by the content analysis of the financial reports of the companies. Also, articles focusing on SRI portfolios
and mutual funds were dropped as the study was designed to incorporate only those studies that conducted their analysis on firm-
specific performance indicators. The final data set consists of 199 articles which I, then, use for bibliometric analysis. Table 1
shows the data extraction processes.
2.2. Methodology
This study follows two step methodology. The first step follows bibliometric analysis which includes scientometric analysis of
published articles and citations to measure their impact (Khan et al., 2021, 2020) which is emerging trend in the domain of finance
(Baker et al., 2021; Paltrinieri et al., 2019) and helps to understand the leading trends in the literature (f.i. leading authors, journals
etc.) and conceptual structure of the literature (Stanley, 2001). Following the previous literature (Pattnaik et al., 2020; Khan et al.,
2020; Paltrinieri et al., 2019), I apply the bibliometric analysis in the following four dimensions: (1) bibliometric citation analysis, (2)
bibliometric co-authorship analysis (3) cartography/keyword analysis and (4) bibliographic coupling along with content analysis. To
conduct the aforementioned four analysis, I use VOSviewer to build the visualization of networks within ESG literature and Bib
liometrix along with Biblioshiny package in R program which helps to comprehend influential structure of literature. Both, Bib
liometrix package of R and VOSviewer, programs are widely used in the earlier literature to assess the bibliometric data (Khan et al.,
2021, 2020; Paltrinieri et al., 2019).
At the second step, I conducted a meta-analysis of each research stream identified by bibliographic coupling. Table 2 shows the list
of variables used as independent variables in each stream. The idea is to complement each of the research streams with an average
effect size. Meta-analyses are used to draw general conclusions from the results of statistical analyses (Hedges, 2015). In economics and
finance, mata-analysis is widely used especially in the areas infused with controversy (Zigraiova and Havranek, 2016). For example,
earlier studies on meta-analysis mainly focused on competition-stability nexus in banking industry (Zigraiova and Havranek, 2016),
establishing a link between the concentration of carbon dioxide and global worming (Reckova and Irsova, 2015), social cost of carbon
(Havranek et al., 2015), price elasticity of gasoline (Havranek et al., 2012) and, ESG and corporate governance (Lagasio and Cucari,
2019). Generalized findings are gleaned from the meta-analysis of these studies having conflicting results.
I followed Borenstein et al. (2009) to conduct meta-analysis of highlighted research stream. There are two main approaches to
conduct meta-analysis: (a) fixed effect model and (b) random effect model. Both of these approaches calculate the true effect size
through weighted average mean of effect sizes reported in the study. Weights assigned to each study is the inverse of variance. we used
random effect model to calculate average effect sizes.
Fixed effect model assumes that there exists one true effect size that underlines all the studies included in the analysis and the
observed variance among the effect sizes is because of sampling error, which is calculated as,
1
vy = (1)
N− 3
vy is within study variance and N is the sample size of each study. The weight of each study is calculated as,
/
wi = 1 vy (2)
Whereas, according to the random effect model, there is no single true effect size for a sample of studies, but the true effect size varies
from study to study. So, the total variance for the calculation of true effect size is the sum of within study variance and between study
variance.
T.V = Vy + t2 (3)
2
T.V is the total variance and t is between study variance, which is calculated by the following formulae,
Table 1
Search criteria and results.
Total
Steps Description
Articles
Step 1 Articles appeared as a result of selected keywords 989

Published articles and review paper retrieved using the following filters, English language for the period of 2012–2020, Scopus of
Step 2 672
categories: business finance, business, economics, Management, Ethics and operation research management sciences
Step 3 Articles after Screening the data by reading it independently and removing the non-relevant articles 199
3
Table 2
List of variables in each stream.
Stream Variable Proxy
Return on Assets
Financial Performance
Return on Equity
Tobin Q
Market Performance
Stock return
Log of total Asset
Firm characteristics and ESG Size
Log of Total Revenue
performance
Debt to Equity
Leverage
Total debt
Company Beta Beta
Innate earning
Earning Quality
Discretionary Accruals
Board Gender Diversity Percentage of Women directors on board
A dummy variable that takes the value of 1 if chief executive of the company also holds the
CEO Duality
Corporate governance and ESG position of the Chairman of the Board
performance Board Independence Percentage of independent director on board
Presence of CSR This variable is proxied by a dummy variable that takes the value of 1 if there exist a committee
Committee otherwise 0
Financial Performance Return on Assets
Return on Equity
Tobin Q
Market Performance
Financial materiality of ESG Stock return
disclosure Credit ratings
Risk
Bond yield spread
Innate earning
Earning Quality
Discretionary Accruals
Q − df
t2 = (4)
C
And
∑
k
∑
k ( wi βi )2
Q= wi Yi − i=n
(5)
i=n
∑k
wi
i=n
wi is the weight of an individual study in the sample and is the effect size of each individual study included in the analysis.
df = k − 1 (6)
df is the degree of freedom and k is the number of studies in each research stream
∑
k
wi 2 β i
C= wi − (7)
i=n
∑k
wi
i=n
Average effect size is calculated as

∑
k
Wi βi
M = i=1k (8)
∑
Wi
i=n
Here
1
Wi = (9)
T.V
√̅̅̅̅̅̅
This allows us to calculate the variance of summary effect sizes as Vm = 1/Wi and standard error of effect size as S.E = Vm .The
95% confidence upper and lower limits are calculated as, M ± 1.96(S.M).
I2 is used to check the consistency of summary effect sizes (Higgins et al., 2003a, 2003b). If the value of I2 is closer to 0 it shows that
the observed variance is spurious and the summary effect sizes are consistent, by contrast, if the I2 value is closer to 1 then it would
make sense to speculate about the reason of heterogeneity. Limited number of studies in research streams restricts to conduct
meta-regression as it will generate misleading results (Borenstein et al., 2009).
4
3. Results and discussions
In this section, I have discussed the results of the Scientometric and Meta-analysis. The scientometric analysis includes (1) Liter
ature coupling analysis; (2) Keyword analysis; (3) Co-authorship analysis, (4) Literature Citation analysis (5) Country activity Analysis.
Moreover, a meta-analysis of the identified research streams will present the average effect size of each cluster.
3.1. Number of publication
Fig. 1 shows the annual number of publications that discuss environmental, social, and governance rating scores as a proxy for
sustainability and their impact related articles. Only a single article belongs to 2012. Sustainability was a relatively neonate concept as
Sustainable Development Goals (SDG’s) were born at the United Nation (UN) conference in Rio di Jinnario. This article is about
constructing environmental indicators in line with social and governance indicators to assess ESG performance. The concept attracted
the researchers’ attention noticeably from the EU after EU Directive 2014/ 95 was established, making it mandatory for large-sized
firms to report non-financial information publicly.
3.2. Literature coupling analysis
Table 3 summarizes the journals that publish articles related to ESG rating impact. The total number of articles produced, the
average citation per article, and the average normalized citation are used to judge a source’s dominancy in the field. Sustainability
(Switzerland) is the most influential journal in the area, with 36 articles produced, followed by Business Strategy and the Environment
(9 articles) and Corporate Social Responsibility and Environmental Management (8 articles). As far as the number of average citation
and average normal citations are concerned, Sustainability (Switzerland) is replaced by the Journal of Business Ethics (average citation
34 & average normal citations 2.48), although its number of publications is low (4 articles), followed by the Journal of Business
Strategy and Environment (average citations 34 & average normal citations 2.09) and the Journal of Cleaner Production (average
citations 30 & average normal citations 2.4).
3.3. Cartography/keyword analysis
In order to understand the thematic growth of sustainability literature, we performed network visualization analysis of the high
frequency keywords with a minimum occurrence criterion set equal to three as shown in Fig. 2 and Table 4. Keywords reflect research
topics in a specific field (Chen et al., 2021; Su and Lee, 2010).
The most commonly occurring keywords are corporate social responsibility (56 times), sustainability (36 times) and ESG (31 times)
which implies that literature uses environmental, social, and governance indicators/ratings as a proxy for corporate social re
sponsibility or sustainability. Governance approach and the environmental occurred 24 and 21 times, respectively, and the word
"social" occurred 13 times. This shows literature conducted on the differential impact of sustainability indicators on the value creation
process (Jitmaneeroj, 2016; Velte, 2017) and highlighted corporate governance and environmental performance as key drivers of
sustainability, whereas social issues are only important for firms that are characterized by public visibility and stakeholder activism
(Baldini et al., 2018; Fatemi et al., 2018). The keywords "corporate social performance" and "sustainable development" indicate the
stream of literature dedicated to studying how sustainability performance can be improved. The word integrated reporting shows the
stream of literature related to sustainability reporting. It is noteworthy that the frequency of occurrence of key words is low, showing
the newness of the topic and the urgency of future research in the field.
3.4. Co-authorship analysis
Table 5 shows the list of the most influential authors writing ESG score impact-related articles. Gregor Dorfleitner from the Uni
versity of Rosenburg and Prof. Patricia Crifo from École Polytechnique are the most productive authors. Simultaneously, in terms of
average citations and average normal citations analysis, it shows that Dr. Gerhard Halbritter from the University of Rosenburg and
Fig. 1. Growth of literature.
5
Table 3
Leading journal on ESG.
Journal Name Documents Average Citation Average Normal Citation
Sustainability (Switzerland) 36 10.42 1.2

Business Strategy and the Environment 9 33.67 2.09
Corporate Social Responsibility and Environmental Management 8 8 1.29
Journal of Cleaner Production 7 29.71 2.4
Journal of Asset Management 6 17.67 1.02
Journal of Portfolio Management 5 3 0.67
Journal of Sustainable Finance and Investment 5 1.4 0.21
Journal of Banking and Finance 4 22.25 1.22
Journal of Business Ethics 4 33.5 2.48
Social Responsibility Journal 4 6.5 0.6
Fig. 2. Keyword analysis in the sustainable finance literature.
Eduardo Ortas from Zaragoza University have the most considerable annual influence in the field.
Collaboration between authors increases the efficiency and productivity of the research community. To highlight the researchers’
networks working on ESG indicators as reported in Fig. 3, visualized through VOSviewer. Following Paltrinieri et al. (2019), we set the
criteria as follows:
• The minimum number of documents an author is 3.

• The minimum citation of an author is 25.
Out of 472 authors, only 12 fulfilled the criteria. The co-authorship shows the network of the most productive authors in the field of
sustainable finance. Out of 9 clusters, only clusters 1,2 and 3 (red, green and blue, respectively) consist of two authors, which shows
that collaboration and communication have not yet been developed in this field.
6
Table 4
Most repeated keywords.
Key words Frequency of Occurrence
Corporate social responsibility 56

Sustainability 36
ESG 31
Sustainable development 29
ESG performance 25
Governance approach 24
Environmental 21
Financial performance 18
Corporate governance 17
Social 13
Performance assessment 12
Integrated reporting 10
Table 5
Top authors.
Name Articles Average Citation Average Normal Citation Affiliation
Dr. Gerhard Halbritter 3 31 1.11 University of Rosenburg

Eduardo Ortas 3 30 1.38 Zaragoza University
María Jesús Muñoz Torres 3 28 2.92 Catedrática Economía Financiera
Dr. Gregor Dorfleitner 4 23 0.83 University of Rosenburg
José Luis Miralles-Quirós 3 21 1.82 University of Extremadura
Maria Del Mar Miralles Quiros 3 21 1.82 University of Extremadura
Zabihollah Rezaee 3 20 1.68 University of Memphis
Patricia Crifo 4 19 1.01 Ecole Polytechnique
Sebastian Utz 3 12 0.67 University of St. Gallen
Fig. 3. Science mapping of co-authors.
7
3.5. Literature citation analysis
This section discussed the most influential articles in the ESG field highlighted by the citation analysis. In VOSviewer, I set the
minimum citation criteria equal to 58, which brought the ten most influential articles listed in Table 6. The following is a brief dis
cussion of the top ten most cited papers.
1. The most normalized cited article that studied corporate sustainability through the ESG Performance Index is by (Bernardi and
Stark, 2018), which analyzed the impact of reporting regime change on analysts’ forecast accuracy. The study aims to evaluate
the usefulness of integrated reporting from a user perspective. The study found that ESG disclosure plays a mediating role in
determining the effectiveness of integrated reporting.
2. Lai et al. (2016) received the second-highest normalized citation rate. The paper examines whether the adoption of integrated
reporting originates from the need to address the legitimacy risk. They used the ESG score to measure the degree of transparency
of firms reporting on environmental, social and governance performance.
3. Fatemi et al. (2018) investigated whether ESG disclosure moderates the relationship between a firm’s ESG activities and its
valuation.
4. Eccles and Serafeim (2013) analyzed the tradeoffs between ESG performance and financial performance and suggested sus
tainable strategies to serve the purpose. i.e., enhance both the performances simultaneously. They offered a two-step formula,
namely, to focus on the most material ESG concerns and then introduce the relevant innovations in products that deal with these
concerns.
5. Arayssi et al. (2016) tested the impact of female directors on the association between integrating reporting and shareholder
welfare.
6. Lokuwaduge and Heenetigala (2017) studied the extent of ESG disclosure in the mining sector. The paper highlighted three key
drivers of sustainable development: (a) shareholder activism, (b) regulation to promote integrated reporting, and (c) the
development of an ESG Disclosure Index used as a benchmark to evaluate ESG performance.
7. Stellner et al. (2015) probed the impact of ESG Score on credit ratings and found a weak relationship.
8. Mervelskemper and Streit (2017) studied the effect of integrated reporting on firm value and found that firms that follow in
tegrated reporting generate higher returns than their counterparts.
9. Singal (2014) also endorsed the positive relationship between sustainable performance and financial performance in the
hospitality sector. This increased performance in terms of a higher credit rating is attributed to the reduction in environmental
risk.
Table 6
Top cited articles.
Total Normalized SJR
Rank Author Title Year Source Title
Citation Citation Rank
Environmental, social and governance

Cristiana Bernardi & The British Accounting
1 disclosure, integrated reporting, and the 2018 74 3.9 Q1
Andrew W. Stark Review
accuracy of analyst forecasts
Corporate Sustainable Development: is
Business Strategy and the
2 Alessandro Lai ‘Integrated Reporting’ a Legitimation 2016 88 3.89 Q1
Environment
Strategy?
Ali Fatemi, Martin ESG performance and firm value: The
3 2018 66 3.75 Global Finance Journal Q2
Glaum & Stefanie Kaiser moderating role of disclosure
4 Eccles & Serafiem The Performance Frontier 2013 102 3.12 Harvard Business Review Q2
Mahmoud Arayssi, Sustainability
Women on boards, sustainability reporting
5 Mustafa Dah 2016 59 2.8 Accounting, Management Q1
and firm performance
&Mohammad Jizi and Policy Journal
Integrating Environmental, Social and
Chitra Sriyani De Silva Governance (ESG) Disclosure for a Business Strategy and the
6 2017 63 2.31 Q1
Lokuwaduge Sustainable Development: An Australian Environment
Study
Corporate social responsibility and
Journal of Banking and
7 Christoph Stellner Eurozone corporate bonds: The 2015 60 2.23 Q1
Finance
moderating role of country sustainability
Enhancing Market Valuation of ESG
Laura Mervelskemper Business Strategy and the
8 Performance: Is Integrated Reporting 2017 58 2.03 Q1
and Daniel Streit Environment
Keeping its Promise?
The Link between Firm Financial
Sustainability and
9 Manisha Singal Performance and Investment in 2014 59 1.88 NA
Finance
Sustainability Initiatives
Financial, governance and environmental
Grigoris Giannarakis and
10 determinants of corporate socially 2014 58 1.84 Management Decision Q1
George Konteos
responsible disclosure
8
10. Giannarakis et al. (2014) investigated the determinants of ESG performance, including: CEO duality, female representation on
board, Green House Gas emissions, emission reduction initiatives, company risk premium, leverage, and industry profile.
3.6. Countries activity analysis
Table 7 shows the list of countries entangled in studying ESG rating as a measure of corporate sustainability and its impact related
articles. The list is inhabited by EU member states; worth mentioning are Italy, Germany, France, and Spain. At the same time, the
United States is at the top of the list with 26 articles. Among Asian countries, Malaysia, India, and China endeavored to contribute to
the literature. It is also worth mentioning that although some countries have produced few articles, their average citation is
comparatively high. For example, Canada and Australia have the highest average citations, indicating a strong influence.
I visualize Fig. 4 to highlight the network of countries in this field of research. I set the analysis criteria for each country to have
published at least three articles with a minimum of 30 citations; 15 countries out of 52 satisfy the requirements.
The analysis highlights five clusters; each cluster represents the network of countries working together. The highlighted clusters are
red (Canada, China & France), green (Spain, Germany & Denmark), blue (Italy, United Kingdom and Egypt), yellow (Australia &
Singapore) and purple (South Korea and the United States).
3.7. Content analysis of research streams
This section discussed the conceptual structure of the sustainable finance literature, revealed by the bibliographic coupling function
of the VOSviewer (Fig. 5). Bibliographic coupling is based on the idea that if articles are cited together by an article, then there are
strong chances that content material of theses paper would be similar. It is a subjective approach which needs manual observation for
the rectification of clusters. In VOSviewer, we set the minimum citation criteria as ten, implying that the cluster is comprised of only
those articles which are cited together at least ten times. Fig. 5 shows the research streams in the form of red, green and blue colors.
The first cluster which is marked as red, comprised of 34 articles that investigated the relationship between ESG disclosure and
financial performance. In this cluster financial performance is discussed in two primary contexts (1) ESG ratings/score effect on
financial performance (Folger-Laronde et al., 2020; Huang, 2021; Nollet et al., 2016; Rajesh and Rajendran, 2020) and (2) effect of ESG
rating on the cost of capital (Capelle-Blancard and Petit, 2019; Cheng et al., 2014; Hamrouni et al., 2020).
The first strand of literature in the red cluster has discussed the financial performance in terms of (a) abnormal returns, (b) portfolio
performance of funds that invested in socially responsible securities and (c) earning management. In comparison, the second strand in
red cluster discussed the impact of ESG on cost of capital.
To get an overview of the anatomy of ESG and financial performance segment of the sustainable finance literature; some most
relevant paper of each of the type were analyzed in depth. To name a few (Cajias et al., 2014; Girerd-Potin et al., 2014; Limkriangkra
et al., 2017; Singal, 2014) discussed the relationship of socially responsible dimensions, i.e. non-financial stakeholder, financial
stakeholders, society and market’s reaction in term of higher liquidity, stock prices and abnormal financial returns.Whereas studies
using accounting based profitability measures reported a mixed response. A stream suggest that as it cost money to be engaged in CSR
activities with no short run financial benefits, so it reduces profitability of the company (Garcia et al., 2017) Whereas the second
opinion is that as socially responsible firms are well managed, so they are more profitable (Ahmed et al., 2019; Alkaraan et al., 2022;
Chairani and Siregar, 2021). As far as the financial performance of the funds is concerned, most of the studies did a comparative
analysis of socially responsible mutual funds and conventional funds by using factor models and reported that socially responsible
funds outperform their conventional counterparts. They further documented that this outperformance is because of the mitigation of
ESG related risks (Henriksson et al., 2019; Nofsingera and Varma, 2014). Mohmed et al. (2019) and Rezaee and Tuo (2019) discussed
the association between ESG disclosure and earning quality of firms and reported a positive link.
The second strand of literature in the red cluster investigate the financial performance in terms of the reduced cost of capital.
Socially responsible firms have better access to the finance as because of shareholder engagement, ESG disclosure reduces agency cost
and also the reduced informational asymmetry enhances investor trust (Cheng et al., 20140). Crifo et al., (2015) used an experimental
Table 7
Summaries of active countries on ESG literature.
Rank Country Documents Citations Average Number of Citation Average Norm. Citation
1 United States 26 456 18 1.2

2 Italy 25 360 14 1.3
3 Germany 22 450 20 1.2
4 United Kingdom 22 255 12 1.3
5 Spain 20 307 15 1.4
6 France 13 219 17 0.9
7 South Korea 13 74 6 0.6
8 Australia 10 202 20 0.8
9 Malaysia 10 20 2 0.3
10 India 9 43 5 1.4
11 Canada 7 137 20 0.9
12 Netherlands 6 18 3 0.5
13 China 5 53 11 1.2
9
Fig. 4. Most active countries.
Fig. 5. Bibliographic coupling analysis.
10
approach to observe the behavior of expert equity investors by releasing information related to ESG and reported an asymmetric effect
that investors reacted more strongly to the bad ESG news as compared to the good ESG news.
It is also important to mention that quantitative analysis is the dominant estimation method used and most of the articles docu
mented that research related to CSR is exposed to problem of endogeneity (Mohmed et al., 2019). To account for this issue, the
literature has used lagged fixed effect model (Manita et al., 2018), Generalized methods of moments (Chollet and Sandwidi, 2018)
Two-stage least squares (Lee et al., 2016) and Three-stage least squares (Aerts et al., 2008).
As far as the second cluster is concerned, most of the articles fall under the umbrella of determinants of ESG performance, i.e.,
factors that regulate firm ESG performance. This cluster is extensively populated with the articles that highlighted the role of the board
of directors in terms of size and feminization of the board. The findings of the literature can be divided into two major groups. Majority
of the researcher reported that women director promotes the social agenda in boardrooms. Board feminization not only promotes
male-female equality and organizational justice but also involve a sustainable behavior (Anazonwu et al., 2018; Arayssi et al., 2016;
Cucari et al., 2018; Gurol and Lagasio, 2022). On the other hand, few articles found an insignificant relationship. There are two major
reasons mentioned by the literature. First one is threshold hypothesis which says that there must be at least three or more female board
members for their active role. Secondly, society is characterized by collectivism where the opinion of the minority goes with the
majority (Husted and Sousa-Filho, 2019; Manita et al., 2018).
Other determinants discussed in this stream include CEO duality (Lagasio and Cucari, 2019; Tamimi and Sebastianelli, 2017; Velte,
2019), Institutional ownership (Avetisyan and Hockerts, 2017) stakeholder (Dhaliwal et al., 2014; Ortas et al., 2019) role of media
related to reputational risk (Aerts et al., 2008; Hammami and Zadeh, 2020) and Cross listing (Yu et al., 2021; Del Bosco and Misani,
2016),
Cluster 3 which is colored as blue includes only 11 documents that have streamlined integrated reporting as a mean of commu
nicating ESG performance of a firm to its stakeholder and most of the articles are documented in the South African context. As far as the
methodological background of this cluster is concerned, most of the studies used qualitative methods i.e. content analysis of the semi-
structured interviews or online surveys. For example, Adams (2017) studied the inter-relationship between integrated reporting,ESG
related risks and delivering on corporate strategy. They used an Inductive research approach where non-executive directors and board
chairs of Johannesburg Stock Exchange (JSX) and the Australian Stock Exchange (ASX) were interviewed. JSX requires companies to
have social and sub ethical committees for ensuring integrated reporting while in ASX, it comes under the director liability legislation.
The interview aimed to get their view on the management of ESG risks and their implication on delivering long term strategy and the
role of corporate reporting on managing ESG risk. The study confirms that reporting affected the management of ESG risks and fed the
long-term corporate strategy for value creation. Governments are positioned better like in South Africa to influence the well-being of
their people because of the increased stakeholder activism and consequential desires of business to improve the welfare of the nations.
Secondly, the disclosure of ESG related information is not homogeneous but there exists an industry-wise pattern. High impact
sectors like mining and material report more information on environmental and social indicators, whereas retail sector reported more
information on governance indicators. There is no strict adherence of the procedures to be followed, as long as the companies
"complied" with the minimum requirements of the JSX Socially Responsible investment (SRI) Index. The lack of reporting all the
business dealing in the various market sector would make JSE SRI an inefficient reporting system. This lack of standardization of
reporting will also affect the credibility and will put the company’s reputation at risk (Maubane et al., 2014). Few articles probed the
quality and readability of Integrated reporting’s, for example, Odriozola and Baraibar-Diez (2017) argued that an increase in the
quality of sustainability and CSR reports will improve the corporate image whereas explored that firms with higher ESG performance
will use plain language in comparison to those with low ESG performance who try to hinder themselves under the veil of complex and
complicated sentences.
3.7.1. Theoretical framework

This section will discuss the dominant theories that have been integrated in developing the theoretical framework of sustainable
finance literature. The discussion will include the introduction of each theory and its linkage with sustainability.
3.7.1.1. Stakeholder theory. Stakeholder theory contemplates the relationship of the organization with its stakeholders and is
extensively used as theoretical framework of ESG literature. Business sustainability considers stakeholders as individuals or groups of
individuals who can affect or can be affected by business activities (Freeman, 1984). Sustainability disclosure is a way of commu
nicating an organization’s performance in terms of the interests of different stakeholders. Taking into account Freeman’s definition of
stakeholder, stakeholders can be categorized into internal and external shareholders, strategic and moral shareholders, employees,
customers, and society as a whole. According to the stakeholder perspective, an organization must meet the expectations of its different
stakeholder which is generally termed as sustainable performance in modern finance. Literature reported that organization sustainable
performance is a function of organization type, shareholder activism, institutional ownership, Corporate governance practices public
visibility and media coverage (Grewal et al., 2019).
Prior literature evidenced that ESG ratings is a quantitative tool to measure satisfaction of stakeholders interests and is a source of
competitive advantage in terms of reduced risk (Li et al., 2022) and lower cost of capital (Kaiser and Welters, 2019; Chen and Yang,
2020; Hamrouni et al., 2019), and higher financial and market performance by creating legitimacy for the business activities and by
increasing the liquidity of the relevant stock (Nollet et al., 2016; Velte, 2017).
3.7.1.2. Institutional theory. Institutional theory is the second most frequently used theoretical framework highlighted by the
11
visualization analysis. The institutional theory analyzes the organization forms and explains the reason behind a homogeneous
organizational structure of firms operating within the same corporate field. The institutional theory considers organizations to work
within a given set of values norms, and assumptions which constitute a reasonable economic behavior. Since Institutional theory
considers an organization a subset of the society (Scott, 1987), it links corporate CSR and other accounting practices to the standards
and values of a society. The theory is widely used by the researchers working in the field of sustainability to understand the relationship
of socially responsible movement and institutional change towards CSR (Avetisyan and Hockerts, 2017), identifying the determinants
of ESG performance ( Brammer et al., 2012; Tamimi and Sebastianelli, 2017) and in the field of integrated reporting (Aouadi and
Marsat, 2018; Katsikas et al., 2017).
3.7.1.3. Legitimacy theory. Legitimacy theory is the third most relevant theory for explaining the sustainability disclosure. It stresses
on the functionality of an organization within the values and norms of a society. A social contract/moral obligation exists between a
business and its respective society. This social contract dictates the working relationship of an organization with its environment, i.e.
whether an organization is meeting the social expectations or not. The terms of this social contract can be explicit or implicit. Explicit
terms include the legal formalities required by legal, constitutional authority, and implicit terms include the expectations of the so
ciety, which of course include environmental and social issues. Legitimacy theory is used as a theoretical framework by several studies
in sustainable finance domain like Del Bosco and Misani, (2016) studied the effect of cross-listing on environmental social and
governance disclosure and argued that firm that is going to cross-list, increases ESG disclosure to legitimize their action and also for
reducing the liability of foreignness.
Firms consistently disclose non-financial information under social and political pressure to preserve their legitimacy by fulfiling
their social contract of disclosing non-financial information (Ng and Rezaee, 2015). Legitimacy theory goes beyond the goal of eco
nomic profits and speaks about value creation. Its deliberate implementation considers social activities as a mean of demonstrating that
their corporate action is legitimate and are as per the norms of good citizenship (Odriozola and Baraibar-Diez, 2017; Reverte, 2009).
3.8. Mata analysis of the research streams
Based on the selected papers, a comprehensive analysis was conducted to highlight and discuss the main research streams in
sustainable corporate finance literature that has used ESG ratings as a yardstick for sustainable performance. After careful manual
observation of the sample articles, research streams were identified, and articles were grouped into main research streams and sub-
streams depending on the theme of the paper. We combine the effect size of only those studies that have relevant information for
conducting the analysis and conceptually share the same research questions. In this regard, three leading research streams were
identified as (1) firm characteristics and ESG performance, (2) corporate governance and ESG performance and (3) financial mate
riality of ESG disclosure. The results of each of the streams are discussed below.
3.8.1. Firm characteristics and ESG performance

Table 8 shows the average effect sizes of the key drivers of corporate sustainability. We performed a meta-analysis for each of the
leading research streams by using a random-effect model (Lagasio and Cucari, 2019).
The subgroup analysis suggests that there is a positive association between financial performance and firm sustainability perfor
mance that is statistically significant as well. The 95% confidence upper and lower limits are [0.04, 0.23]. The value of I2 is close to
zero, indicating that the effect size is consistent across the sample studies and all the observed variance is spurious (Borenstein et al.,
2009). This will allow us to generalize the results globally as the sample constitutes a very diversified set of firms from all around the
globe.
Leverage and firm size are the most commonly used control variables in ESG performance determinant related articles and have a
statistically significant and positive relationship with ESG performance. These effect sizes are mildly heterogeneous, as suggested by
their respective I2 values.
The company’s beta is also statistically significant and positively affects ESG performance, which supports the legitimacy theory
view of ESG disclosure that riskier firms disclose more information to protect their reputation. The sample size of the primary studies
included in this stream covers a wide range of countries and the value of I2 suggests that the average effect size is inconsistent. The
Inconsistency of effects sizes points towards the relevance of constitutional and macro-economic indicators that varies across
countries.
3.8.2. Corporate governance and ESG performance

The second stream of ESG literature delineates corporate governance as an authoritative tool to enhance sustainability
Table 8
Meta-analytics of firm specific characteristics.
Determinant of ESG Mean Effect Size S.E z-stat p (z) N 95% CI LL 95% CI UL I^2
Financial Performance 0.1347 0.0494 2.7248 0.0032 41,418 0.0378 0.2316 0.0985
Size 2.3073 0.9056 2.5478 0.0054 7349 0.5323 4.0823 0.6816
Leverage 0.0699 0.0367 1.9049 0.0284 36,167 -0.002 0.1419 0.4921
Beta of the Company 0.197 0.1261 1.5622 0.0591 8444 0.8879 1.0001 0.9887
12
performance. In this regard, board gender diversity is highly debated in the literature. Table 9 reports, on average, a positive rela
tionship between board gender diversity and ESG performance.
Women directors promote the social agenda in boardrooms. Board feminization promotes male-female equality and organizational
justice and enhances an organization’s sustainable behavior (Anazonwu et al., 2018; Arayssi et al., 2016; Cucari et al., 2018). On the
other hand, the content analysis of the primary studies reveals that very few articles found insignificant relationships. The literature
mentions two major reasons. The first one is the threshold hypothesis, which says that there must be at least three or more female board
members for their active role. Secondly, society is characterized by collectivism, where the opinion of the minority goes with the
majority (Husted and Sousa-Filho, 2019; Manita et al., 2018).
CEO duality has a negative but insignificant impact, which refrains us from drawing any conclusion. This insignificance was ex
pected as we only found three studies in this stream, and the relationship was non-directional. For example, Velte (2019) found a
positive relationship, whereas Giannarakis et al. (2014) and Romano et al. (2020a, 2020b) found a negative association.
Board independence has a positive and significant impact on ESG performance. The 95% CI lies on the positive side. The results are
not consistent across the sample of studies, as suggested by the I2 value.
The presence of a CSR committee is another sustainable behavior booster. It showed a positive impact on CSR performance with a
consistent impact size. The role of the CSR Committee is to shape the CSR policies. The role of the CSR Committee is to assist the board
with ESG performance and regulate the quality and quantity of ESG disclosure. Literature shows that firms that have an established
CSR committee exhibit extraordinary ESG performance than those without a CSR committee (Baraibar-Diez and Odriozola, 2019;
Cucari et al., 2018; Sadiq et al., 2020; Shahbaz et al., 2020).
As shown in Table 9, this stream has a comparatively bigger data set than other governance-related studies. The effect sizes are
consistent across the studies.
To conclude the corporate governance and ESG stream, there is still a research gap in this area, and results cannot be generalized
globally for policy implications as the primary studies of this stream analyzed a small sample size, mainly from the US and European
context. The research gap needs to be filled with studies that use more extensive data sets covering different geographical contexts for
the generalizability of results.
3.8.3. Financial materiality of ESG disclosure

This strand of literature has discussed the materiality of ESG disclosure in terms of (a) financial performance, (b) market perfor
mance, (c) risk and (d) earnings management.
It is evident from Table 10 that ESG disclosure has a positive impact on financial performance that is statistically insignificant. I
combined the effect sizes of all those studies that used returns on assets and returns on equity as a proxy for profitability. The sample
size of primary studies constitutes a wide geographical coverage, including countries like the MENA region, the USA, Germany, Egypt,
China, and Korea. The value of I2 indicates that the summary effect size of ESG disclosure on financial performance is consistent across
the sample of studies.
In order to explore the stream and find the reason behind the overall insignificance, we analyzed the content of the papers in detail.
To name a few, (Cajias et al., 2014; Girerd-Potin et al., 2014; Limkriangkra et al., 2017; Singal, 2014) discussed the positive rela
tionship between socially responsible dimensions, namely non-financial stakeholders, financial stakeholders, society, and the market’s
reaction in terms of inflated profits, whereas (Buallay, 2019; Buallay et al., 2020; Zhao et al., 2018) reported a negative association. It
is important to mention that studies that reported a negative association between ESG and financial performance are from the Asian
context, whereas EU and US-based studies reported a positive impact. This also points towards the role of institutional differences in
shaping the effectiveness of non-financial disclosure.
The second cluster discusses the effect of ESG reporting on a company’s market performance. Tobin Q is used as a proxy for market
performance and has shown a positive and significant reaction to ESG disclosure, which supports value creation theory. The firms that
are listed in the ESG index have higher market value and firm value is also sensitive to the position of the firm in the index (Aboud and
Diab, 2018). The impact of ESG disclosure is higher in firms where there is high larger shareholder ownership than in firms with a low
level of large shareholder ownership (Kim et al., 2018). Another important in this regard is by Amer (2018), who discussed that the
market penalizes those companies that joined United Nation Global Combat but failed to submit a sustainability report. These findings
are consistent with Buallay (2019), who reported a significant impact of ESG on market performance but an insignificant association
with financial performance. The effect size is not consistent across the primary studies, which can be attributed to the geographical
diversification of the sample of primary studies. The sample size constitutes 8340 firm level data from around the globe.
ESG disclosure also affects the risk profile of the company. The study found a negative but insignificant relationship, which refrains
us from generalizing the results. When the content of the primary studies in this stream was analyzed, mixed results were reported with
very small coefficients. (Chollet and Sandwidi, 2018; Lueg et al., 2019; Stellner et al., 2015) found a positive association, whereas
Table 9
Role of Governance in ESG Governance.
Variables Mean Effect Size S.E z-stat p (z) N 95% CI LL 95% CI UL I^2
Board Gender Diversity 0.495 0.3017 1.6407 0.05 924 -0.0963 1.0863 0.0000
CEO Duality -0.0699 0.0419 -1.6668 0.0994 578 -0.152 0.0123 0.0000
Board Independence 0.1576 0.0502 3.1658 0.0027 409 0.0604 0.2517 0.6767
Presence of CSR Committee 0.5226 0.0149 38.798 0 4489 0.5009 0.5435 0.4817
13
Table 10
Materiality of ESG Disclosure.
Variables Mean Effect Size S.E z-stat p (z) N 95% CI LL 95% CI UL I^2
Financial Performance 0.1472 0.1911 0.7703 0.273 5139 -0.2273 0.5217 0.0000
Market Performance 0.2605 0.1328 1.961 0.024 8340 0.0001 0.5208 0.6743
Risk -0.0496 0.1602 -0.309 0.621 4953 -0.3637 0.2644 0.0000
Earning Quality -0.0005 0.0577 -0.008 0.503 1340 -0.1136 0.1126 0.0000
(Chollet and Sandwidi, 2018) reported a negative association.

A few studies also probed the effect of ESG disclosure on earnings management. Mata analysis of these studies showed an overall
positive but statistically insignificant association. Previous literature on the link between ESG performance and earnings management
is also inconclusive. For example, Grimaldi et al. (2020) reported an insignificant result, whereas Mohmed et al. (2019) found a
positive effect. Rezaee and Tuo (2019) distinguished between the effect of CSR practices on innate earning quality and discretionary
earning quality and reported a positive relationship for innate earning quality and a negative for discretionary earning quality.
This research area has high attraction for future research as there are very few studies from only Egypt, Italy and the USA context.
Whereas this is an important topic, careful analysis will reveal whether firms use CSR activities to greenwash poor earning quality.
4. Research gaps and future research direction of ESG performance and its impact
The study of ESG metrics in corporate sustainability is a new research area that is on the agenda in both academic research and the
business world. Based on scientometric analysis and detailed literature review, the academic literature on ESG metrics is stacked into
dominant research streams and a framework for future research is proposed on the basis of identified research gaps in Table 11.
4.1. Firm characteristics and ESG performance
Previous research on firm characteristics and ESG performance only focused on large-sized firms (Tamimi and Sebastianelli, 2017).
Small and medium-sized enterprises (SME’s) still need more attention from regulators, governments, and researchers (Yu et al., 2020).
In the presence of this discrepancy, it will be interesting for policy makers and investors to investigate whether SMEs are inclined to
engage in ESG greenwashing.
As far as ownership structure is concerned, literature highlighted institutional shareholding (Coluccia et al., 2018; Ortas et al.,
2019; Rytkönen and Louhiala-Salminen, 2014), but the behavior of privately owned firms/closely held firms still needs to be brought
into light.
Profitability, leverage, and risk profile are the firm specific variables identified by literature as determinants of non-financial
disclosure (Sharma et al., 2020). More emphasis should be put on sector specific analysis by taking into consideration the differ
ences in ESG disclosure and organizational complexities. The role of intangible assets and human capital are among the important
considerations.
There is also very few articles on the role of cross-listing. The firms that are going to cross list on other stock exchanges are supposed
to disclose more ESG information in order to reduce the liability of foreignness (Del Bosco and Misani, 2016; Yu and Luu, 2021).
Strategic orientation of the company is another important variable that is still under the veil. Strategic orientation is the belief
system of a company to conduct its business in the long run (Chevrollier et al., 2020). Despite the importance of sustainability in
business strategy, very little is known about the role of strategic orientation in sustainability and business strategy integration.
4.2. Corporate governance and ESG performance
Existing literature on corporate governance has focused extensively on the role of board gender diversity, size, independence, CEO
duality, and the presence of a CSR committee. These studies were mainly conducted in the European and US contexts (Arayssi et al.,
2016; Cucari et al., 2018; Ismail and Latiff, 2019). Most of the studies in the governance context are conducted with a comparatively
small data set, mostly in individual study settings (Shahbaz et al., 2020). The role of corporate governance should be analyzed in
different institutional settings, like the regulatory framework, law, country’s sustainability score enforcement situation, and free media
independence as moderators.
Addition of religious background of the directors also offer an interesting variable as religion act as code of conduct and results
would highlight the comparative analysis of different religion in shaping the ethical corporate behavior.
The content analysis of this stream also pointed out that most of the empirical literature in governance context is biased towards the
conventional firms and financial institution. There is a dire need of research to explore how the Shariah Governance Mechanism (SGM)
facilitate the Integrating Reporting (IR) and firm sustainability performance.
The role of board networking also needs empirical studies to investigate whether increased board networking stimulate unethical
behavior i.e., insider trading. The role of networking through board is studies by Romano et al. (2020a, 2020b) but the role of social
networking still lacks evidences.
Internal control system of company control quality and quantality of ESG disclosure. Literature still lacks the role of internal control
system in ESG performance. There are few studies that showed the impact of audit quality on ESG performance but the role of internal
14
Table 11
Future research directions.
S.
Future Research Topics References
No
How Investor take into account ESG indicators when making investment decision? This call for the analysis of each (Tamayo-Torres et al.,
1
dimension especially social indicator in depth. 2019)
2 Competitive analysis of high and low disclosing firms with respect to their financial performance. (Minutolo et al., 2019)
(Chollet and Sandwidi,
3 Investigation of nonlinear relationship between corporate social performance and risk
2018)
Future research should focus on developing a standardized definition of different dimension of sustainability so that the
4 (Ng and Rezaee, 2015)
result of different studies can be compared.
The relationship between ESG indicators and profitability in different economic periods i.e. boom and recession should be
5 (Brogi and Lagasio, 2019)
investigated.
It might be interesting to investigate the risk profile of a sustainable portfolio using specific tool like value at risk in order to
6 (Landi and Sciarelli, 2019)
evaluate the Risk return trade off of high ranked ESG securities with those that have low/no ESG profile,
7 Impact of type ESG controversies (severeness and materiality of) on financial performance (Aouadi and Marsat, 2018)
Literature related to CSR is supposed to be exposed to issue of endogeneity. Most of the literatures used lagged fixed effect
8 model and few used GMM. It will be interesting if advanced models like Heckman two stage estimation procedure together (Velte, 2019)
with instrumental variable approach.
9 Impact of ESG ratings on probability of default. Author suggestion
As there are no standardized way of measuring sustainability. An interesting topic in this domain could be to check whether
10 Author suggestion
the results of the relationship between ESG and firm performance is biased towards the selection of the ratings agency.
11 Non-Financial disclosure and market efficiency Author suggestion
12 The effect of female participation in disclosure committees (Arayssi et al., 2016)
How state regulation related to corporate social responsibility and socially responsible investing can be improved as a tool of (Parubchak and Radukh,
13
CSR in member states? 2019)
14 Role of investor associations in influencing responsible behavior in emerging and developing economies. (Yamahaki, 2019)
15 Non-economic consequences of integrated reporting and its impact on reputational risk (Caglio et al., 2020)
16 Role of ESG news presentation and its impact on shareholder decision making (Gray et al., 2019)
17 Moderating role of permanent and temporary tax differences between CSR and stock price volatility (Tasnia et al., 2021)
How integrated information and information in general is provided or retrieved, processed, and evaluated in Strategic
18 (Esch et al., 2019)
decision making
19 Integrating qualitative system dynamics with accounting practices: The case of integrated reporting and resource mapping (Kunc et al., 2020)
20 How to report on multiple types of capital to improve stakeholders’ understanding of organization business models. (Baker et al., 2021)
control strengths and weakness still needs to be highlighted (Koo and Ki, 2020).
4.3. Financial materiality of ESG disclosure
A number of studies have shown that ESG disclosure affects firm financial and market performance in normal market conditions
and during times of crisis as well (Folger-Laronde et al., 2020; Torre et al., 2020). This evidence is based on large firms, whereas smaller
firms and privately held firms might be affected differently. So, these studies can be replicated in SME’s and closely held firms. Also,
the result of different rating scores might be confusing for investors, so it would also be interesting to conduct a comparative analysis of
these ratings scores, which will help to understand whether the results of this literature are biased toward the use of rating agencies.
The growing demand for ESG investing would also demand us to study this phenomenon in M & A settings, i.e. how does the ESG
profile of the target company affect the acquirer’s financial performance and its sustainability and vice versa?
Literature also lacks context in the context of IPO issuance. If the market takes ESG consideration seriously, then the market should
overprice the IPO issuance of high ESG performers as compared to their counterparts. The results of this study will have significant
implications for capital structure decisions as well. If the market overpriced the IPO issuance of high ESG performers, then it would also
be interesting to investigate the behavior of finance managers. When the stock is overvalued, would they use the equity or debt markets
to finance positive NPV projects? Both instruments of the capital markets are affected by ESG disclosure.
The same is the case with the dividend policy, as ESG performance increases firm value. This value-added from ESG practices affects
the dividend payout policy of firms with higher ESG performance. Conversely, another important consequence of ESG disclosure is risk
reduction because of increased transparency (Kaiser and Welters, 2019; Lin and Dong, 2018). Due to the annual nature of available
ESG data, most of the studies used lagged value of ESG information. Whereas ESG is a more dynamic phenomenon and can affect the
firm’s risk structure in the short run. Therefore, using high frequency data for ESG would produce more reliable results (Hua Fan and
Michalski, 2020). There are a number of studies on the relationship between integrated reporting and the cost of debt. But literature is
scant on the association between the quality of integrated reporting and the cost of debt. Furthermore, it will also be interesting for
regulators and policy makers to investigate which characteristics of integrated reporting (connectivity or future-oriented focus) are
more relevant.
5. Conclusion and discussion
There are a few literature review-based studies in the field of sustainable finance. For example, Widyawati (2020) conducted a
systematic literature review of socially responsible investment portfolios based studies and did a mata-analytic review of corporate
15
governance and ESG disclosure, but still there is a lack of studies that bring to light the role of non-financial disclosure, namely ESG
disclosure So, to fill the gap, this paper added a literature review study that applied scientometric analysis to explore the influential
aspects of the research field and mata analysis of dominant research streams. I analyzed 199 articles retrieved from the Scopus
database that used environmental, social, and governance rating scores as a proxy for sustainability. In the first stage, scientometric
analysis was conducted by using a text mining software called VOSviewer to highlight the most pivotal documents, influential authors,
journals, countries, and widespread keywords.
Based on Scientometric analysis and detailed literature review, the main research streams are highlighted. The literature on
corporate sustainability can be categorized into three areas: firm characteristics that affect sustainability performance, corporate
governance as a determinant of non-financial information disclosure, and the financial implications of non-financial information
disclosure. This study conducted a mata analysis of these research streams in order to highlight the average effect size and respective
direction of association.
As far as firm characteristics are concerned, financial performance, size and leverage have a positive relationship with ESG per
formance. Literature indicates that these variables are the characteristics of larger companies. Larger firms have higher debt to total
asset ratios and are competitively highly profitable (Coleman, 2002; Gaio and Henriques, 2018). Consequently, the findings of this
stream have two implications. First, literature on ESG performance is predominantly biased towards larger firms and signifies a gap for
future research to sample SME’s. Secondly, ESG risk is influenced by market capitalization. Larger firms have usually maintained
higher ESG performance due to higher social pressure and a higher degree of visibility in case of unsustainable behavior and stronger
market reaction. These results are consistent with the theory of slack resources, which states that larger firms are under consistent
pressure to disclose more information in order to gain legitimacy (Dorfleitner et al., 2016; Drempetic et al., 2020).
Financial performance and risk reported a bidirectional relationship with ESG performance as these variables appeared on both
sides of models addressing ESG and firm performance. These findings have two theoretical and policy implications. Firstly, firms with
higher profits are more liquid and do not have short term survival issues. These firms have the capacity to invest in CSR projects that
consequently generate long-term integrated value. This view is consistent with stakeholder theory. Secondly, the significance of
systematic risk also implies that sensitive industries exhibit better ESG performance. These industries tend to disclose more infor
mation in order to protect their reputation, supporting legitimacy theory and signaling theory (Garcia et al., 2017; Miralles-Quirós
et al., 2018).
The positive impact of debt shows that the leverage market and high yield bond buyers are forcing companies to follow a standard
disclosure of ESG information (Ho, 2020). Whereas ESG disclosure and integrating reporting, compliance provide incentives for
companies in terms of lower cost of debt, allowing them to time the debt markets (Gerwanski, 2020). A few articles also discussed the
effect of ESG disclosure on earning quality, but the overall impact of these variables is insignificant.
The role of corporate governance is the second dominant research stream. The boards of directors play a leadership role in pro
moting good corporate strategies in their organizations. At the beginning of the sustainable era, boards of directors were skeptical
about investing in CSR projects because of their outdated short-term value maximization perspective. But now there is evidence that
sustainable performance is becoming a priority on the board agenda. Literature has analyzed the effect of different characteristics of
boards on their capacity to deliver sustainable performance. The result of this stream enacts a resource-based view of the firm which
anticipates that human competencies and organizational strategies are a source of competitive advantage for firms (Lagasio and
Cucari, 2019). The highly discussed characteristics are board independence, gender diversity, and board independence, whereas the
presence of a CSR committee is an organizational strategy that is debated by few researchers.
CEO duality is negative but overall insignificant. Primary studies dealing with CEO duality support the theory of managerial
opportunism that CEOs, who are also the chairperson of the board, can use non-financial disclosure as an opportunity to park their
private benefits. Although individual primary studies showed significant mixed results, as the sample size of these studies was low and
economic coefficients were not big enough to report an overall significant result.
This study has some limitations. We extracted data only from the Scopus database. Although it is the largest and most authentic
database, I believe that the data set can be improved by incorporating other databases like the Web of Science and Google Scholar.
Although I have excluded articles from 2021 for analysis purposes, based on the assumption that these articles still need citations for
authentication to be used to explore the intellectual structure of the sustainable finance literature, I content analyzed a few of these
articles to incorporate the latest updates in the field. The study also did not conduct meta regression or sub-group analysis in order to
explain the reason for heterogeneity because of the limited number of primary studies in each study.
References
Aboud, A., Diab, A., 2018. The impact of social, environmental and corporate governance disclosures on firm value: evidence from Egypt. J. Account. Emerg. Econ. 8
(4), 442–458. https://doi.org/10.1108/JAEE-08-2017-0079.
Adams, Carol A., 2017. Conceptualising the contemporary corporate value creation process. Accounting, Auditing & Accountability Journal 30 (4), 906–931.
Aerts, Walter, Cormier, Denis, Magnan, Michel, 2008. Corporate environmental disclosure, financial markets and the media: An international perspective. Ecological
Economics 64 (3), 643–659.
Ahmed, S.P., Ahmed, S.U., Noor, M.F., Ahmed, Z., Karmaker, U., 2019. The policy-led sustainability and financial performance linkage in the banking sector: case of
Bangladesh. Banks Bank Syst. 14 (4), 89–103. https://doi.org/10.21511/bbs.14(4).2019.09.
Ahmed, Ahmed H., Eliwa, Yasser, Power, David M., et al., 2019. The impact of corporate social and environmental practices on the cost of equity capital: UK evidence.
International Journal of Accounting & Information Management 27 (3).
Alkaraan, Fadi, Albitar, Khaldoon, Hussainey, Khaled, Venkatesh, VG, et al., 2022. Corporate transformation toward Industry 4.0 and financial performance: The
influence of environmental, social, and governance. Technological Forecasting and Social Change 175.
Amer, E., 2018. The penalization of non-communicating UN Global Compact’s companies by investors and its implications for this initiative’s effectiveness. Bus. Soc.
57 (2), 255–291. https://doi.org/10.1177/0007650315609303.
16
Anazonwu, H.O., Egbunike, F.C., Gunardi, A., 2018. Corporate board diversity and sustainability reporting: a study of selected listed manufacturing firms in Nigeria.
Indones. J. Sustain. Account. Manag. 2 (1), 65. https://doi.org/10.28992/ijsam.v2i1.52.
Aouadi, Amal, Marsat, Sylvain, 2018. Do ESG Controversies Matter for Firm Value? Evidence from International Data. Journal of Business Ethics 151, 1027–1047.
Arayssi, M., Dah, M., Jizi, M., 2016. Women on boards, sustainability reporting and firm performance. Sustain. Account. Manag. Policy J. 7 (3), 376–401. https://doi.
org/10.1108/SAMPJ-07-2015-0055.
Avetisyan, Emma, Hockerts, Kai, 2017. The Consolidation of the ESG Rating Industry as an Enactment of Institutional Retrogression. Business Strategy and the
Environment 26 (3), 316–330.
Baker, Edward D., Boulton, Thomas J., Braga-Alves, Marcus V., Morey, Matthew R., 2021. ESG government risk and international IPO underpricing. Journal of
Corporate Finance 67, 101913.
Baker, H.K., Kumar, S., Pattnaik, D., 2021. Twenty-five years of the journal of corporate finance: a scientometric analysis. J. Corp. Financ. 66, 101572.
Baldini, M., Maso, L.D., Liberatore, G., Mazzi, F., Terzani, S., 2018. Role of country- and firm-level determinants in environmental, social, and governance disclosure.
J. Bus. Ethics 150 (1), 79–98. https://doi.org/10.1007/s10551-016-3139-1.
Baraibar-Diez, E., Odriozola, M.D., 2019. CSR committees and their effect on ESG performance in UK, France, Germany, and Spain. Sustainability 11 (18). https://doi.
org/10.3390/su11185077.
Bartolacci, Francesca, Caputo, Andrea, Soverchia, Michela, et al., 2020. Sustainability and financial performance of small and medium sized enterprises: A
bibliometric and systematic literature review. Business Strategy and the Enviroment 29 (3).
Bektur, Ç., Arzova, S.B., 2020. The effect of women managers in the board of directors of companies on the integrated reporting: example of Istanbul Stock Exchange
(ISE) Sustainability Index. J. Sustain. Financ. Invest. 0 (0), 1–17. https://doi.org/10.1080/20430795.2020.1796417.
Bernardi, C., Stark, A.W., 2018. Environmental, social and governance disclosure, integrated reporting, and the accuracy of analyst forecasts. Br. Account. Rev. 50 (1),
16–31. https://doi.org/10.1016/j.bar.2016.10.001.
Borenstein, M., Hedges, L.V., Higgins, J.P.T., Rothstein, H.R., 2009. Introduction to Meta-Analysis. John Wiley & Sons, Ltd. https://doi.org/10.1002/9780470743386
Borenstein, M., Hedges, L.V., Higgins, J.P.T., Rothstein, H.R., 2009. Introduction to Meta-Analysis. John Wiley & Sons, Ltd. https://doi.org/10.1002/9780470743386
Brammer, Stephen, Jackson, Gregory, Matten, Dirk, 2012. Corporate Social Responsibility and institutional theory: new perspectives on private governance. Socio-
Economic Review 10 (1), 3–28.
Brogi, Marina, Lagasio, Valentina, 2019. Environmental, social, and governance and company profitability: Are financial intermediaries different? Corporate Social
Responsibility and Environmental Management 26 (3), 576–587.
Buallay, A., 2019. Between cost and value: investigating the effects of sustainability reporting on a firm’s performance. J. Appl. Account. Res. 20 (4), 481–496.
https://doi.org/10.1108/JAAR-12-2017-0137.
Buallay, A., Fadel, S.M., Al-Ajmi, J.Y., Saudagaran, S., 2020. Sustainability reporting and performance of MENA banks: is there a trade-off? Meas. Bus. Excell. 24 (2),
197–221. https://doi.org/10.1108/MBE-09-2018-0078.
Caglio, Ariela, Melloni, Gaia, Perego, Paolo, 2020. Informational Content and Assurance of Textual Disclosures: Evidence on Integrated Reporting. European
Accounting Review 29 (1), 55–83.
Cajias, Marcelo, Fuerst,, Franz, Bienert, Sven, et al., 2014. Can investing in corporate social responsibility lower a company’s cost of capital? Studies in Economics and
Finance 31 (2).
Capelle-Blancard, Gunther, Petit, Aurélien, et al., 2019. Every Little Helps? ESG News and Stock Market Reaction. Journal of Business Ethics volume 157 (2).
Chairani, Chairani, Siregar, Sylvia Veronica, 2021. The effect of enterprise risk management on financial performance and firm value: the role of environmental, social
and governance performance. Environm ental, social and governance 29 (3).
Chen, K., Wang, J., Yu, B., Wu, H., Zhang, J., 2021. Critical evaluation of construction and demolition waste and associated environmental impacts: a scientometric
analysis. J. Clean. Prod. 287. https://doi.org/10.1016/j.jclepro.2020.125071.
Chen, Yi, Yang, Sharon S., et al., 2020. Do Investors exaggerate corporate ESG information? Evidence of the ESG momentum effect in the Taiwanese market. Pacific-
Basin Finance Journal 63.
Cheng, Beiting, Ioannou, Serafeim, George, et al., 2014. Corporate social responsibility and access to finance. Strategic Management 35 (1).
Chevrollier, N., Zhang, J., van Leeuwen, T., Nijhof, A., 2020. The predictive value of strategic orientation for ESG performance over time. Corp. Gov. 20 (1), 123–142.
https://doi.org/10.1108/CG-03-2019-0105.
Chollet, P., Sandwidi, B.W., 2018. CSR engagement and financial risk: a virtuous circle? International evidence. Glob. Financ. J. 38 (April), 65–81. https://doi.org/
10.1016/j.gfj.2018.03.004.
Coleman, S., 2002. Small firm use of debt: an examination of the smallest small firms. J. Entrep. Financ. 7 (1), 51–76.
Coluccia, D., Fontana, S., Solimene, S., 2018. Does institutional context affect CSR disclosure? A study on Eurostoxx 50. Sustainability 10 (8). https://doi.org/
10.3390/su10082823.
Zigraiova, Diana, Havranek, Tomas, 2016. Bank competition and financial stability: much ado about nothing? Journal of economic surveys 30 (5).
Commission, E., 2018. The EU in 2018.
Crifo, Patricia, Forget, Vanina D., Teyssier, Sabrina, 2015. The price of environmental, social and governance practice disclosure: An experiment with professional
private equity investors. Journal of Corporate Finance 30, 168–194. In this issue.
Cucari, N., Esposito De Falco, S., Orlando, B., 2018. Diversity of board of directors and environmental social governance: evidence from Italian listed companies. Corp.
Soc. Responsib. Environ. Manag. 25 (3), 250–266. https://doi.org/10.1002/csr.1452.
Del Bosco, B., Misani, N., 2016. The effect of cross-listing on the environmental, social, and governance performance of firms. J. World Bus. 51 (6), 977–990. https://
doi.org/10.1016/j.jwb.2016.08.002.
Dhaliwal, Dan, Li, Oliver Zhen, Tsang, Albert, Yang, Yong George, 2014. Corporate social responsibility disclosure and the cost of equity capital: The roles of
stakeholder orientation and financial transparency. Journal of Accounting and Public Policy 33 (4), 328–355.
Ding, Ying, Rousseau, Ronald, Dietmar, Wolfram, et al., 2016. Measuring Scholarly Impact. Springer International Pu.
Dorfleitner, G., Halbritter, G., Nguyen, M., 2016. The risk of social responsibility–is it systematic? J. Sustain. Financ. Invest. 6 (1), 1–14. https://doi.org/10.1080/
20430795.2015.1123993.
Drempetic, S., Klein, C., Zwergel, B., 2020. The influence of firm size on the ESG score: corporate sustainability ratings under review. J. Bus. Ethics 167 (2), 333–360.
https://doi.org/10.1007/s10551-019-04164-1.
Eccles, R.G., Serafeim, G., 2013. The performance frontier. Harv. Bus. Rev. 4 (May 2013), 50–60. https://doi.org/10.1017/CBO9781107415324.004.
Esch, Martin, Schnellbächer, Benedikt, Wald, Andreas, 2019. Does integrated reporting information influence internal decision making? An experimental study of
investment behavior. Business Strategy and the Environment 28 (4), 599–610.
Fatemi, A., Glaum, M., Kaiser, S., 2018. ESG performance and firm value: the moderating role of disclosure. Glob. Financ. J. 38, 45–64. https://doi.org/10.1016/j.
gfj.2017.03.001.
Ferguson, M., Martin, N., Lemos-Stein, G., 2019. ESG Sections Added in Corporate Credit Ratings Reports. 〈https://www.spglobal.com/en/research-insights/articles/
sp-global-ratings-launches-esg-sections-in-corporate-credit-rating-reports〉.
Folger-Laronde, Z., Pashang, S., Feor, L., ElAlfy, A., 2020. ESG ratings and financial performance of exchange-traded funds during the COVID-19 pandemic. J. Sustain.
Financ. Invest. 0 (0), 1–7. https://doi.org/10.1080/20430795.2020.1782814.
Freeman, R Edward, 1984. Strategic management : a stakeholder approach. Cambridge university press.
Gaio, C., Henriques, R., 2018. Are large firms more profitable than small and medium firms in the European Union ? Eur. J. Manag. Stud. 23 (1), 25–48.
Garcia, A.S., Mendes-Da-Silva, W., Orsato, R., 2017. Sensitive industries produce better ESG performance: evidence from emerging markets. J. Clean. Prod. 150,
135–147. https://doi.org/10.1016/j.jclepro.2017.02.180.
Gerwanski, J., 2020. Does it pay off? Integrated reporting and cost of debt: European evidence. Corp. Soc. Responsib. Environ. Manag. 27 (5), 2299–2319. https://doi.
org/10.1002/csr.1965.
17
Giannarakis, G., Konteos, G., Sariannidis, N., 2014. Financial, governance and environmental determinants of corporate social responsible disclosure. Manag. Decis.
52 (10), 1928–1951. https://doi.org/10.1108/MD-05-2014-0296.
Girerd-Potin, Isabelle, Jimenez-Garcès, Sonia, Louvet, Pascal, et al., 2014. Which Dimensions of Social Responsibility Concern Financial Investors? Journal of Business
Ethics 121 (4).
Gray, Sidney J., Hellman, Niclas, Ivanova, Mariya N., 2019. Extractive Industries Reporting: A Review of Accounting Challenges and the Research Literature. Abacus
55 (1), 42–91.
Grewal, Jody, Riedl, Edward J., Serafeim, George, 2019. Market Reaction to Mandatory Nonfinancial Disclosure. Management Science 65 (7), 2947–3448.
Grimaldi, F., Caragnano, A., Zito, M., Mariani, M., 2020. Sustainability engagement and earnings management: the Italian context. Sustainability 12 (12), 1–16.
https://doi.org/10.3390/SU12124881.
Gurol, Burcu, Lagasio, Valentina, 2022. Women board members’ impact on ESG disclosure with environment and social dimensions: evidence from the European
banking sector. Social Responsibility Journal. In press.
Hammami, Ahmad, Zadeh, Mohammad Hendijani, 2020. Audit quality, media coverage, environmental, social, and governance disclosure and firm investment
efficiency: Evidence from Canada. International Journal of Accounting & Information Management 28 (1), 45–72.
Hamrouni, Amal, Boussaada, Rim, Toumi, Nadia Ben Farhat, 2019. Corporate social responsibility disclosure and debt financing. Journal of Applied Accounting
Research 20 (4), 394–415. In this issue.
Hamrouni, Amal, Uyar, Ali, Boussaada, Rim, et al., 2020. Are corporate social responsibility disclosures relevant for lenders? Empirical evidence from France.
Management Decision 58 (2).
Havranek, Tomas, Horvath, Roman, Irsova, Zuzana, Rusnak, Marek, et al., 2015. Cross-country heterogeneity in intertemporal substitution. Journal of International
Economics 96 (1).
Havranek, Tomas, Irsova, Zuzana, Janda, Karel, et al., 2012. Demand for gasoline is more price-inelastic than commonly thought. Energy Economics 34 (1).
Hedges, Larry V., 2015. Meta-Analysis Larry. Journal of Educational Statistics 17 (4).
Henisz, W.J., McGlinch, J., 2019. ESG, material credit events, and credit risk. J. Appl. Corp. Financ. 31 (2), 105–117. https://doi.org/10.1111/jacf.12352.
Henriksson, Roy, Joshua, Livnat, Pfeifer, Patrick, Stumpp, Margaret, et al., 2019. Integrating ESG in Portfolio Construction. Journal of Portfolio Management 45 (4).
Higgins, J.P.T., Thompson, S.G., Deeks, J.J., Altman, D.G., 2003. Measuring inconsistency in meta-analyses. Br. Med. J. 327 (7414), 557–560. https://doi.org/
10.1136/bmj.327.7414.557.
Higgins, J.P.T., Thompson, S.G., Deeks, J.J., Altman, D.G., 2003. Measuring inconsistency in meta-analyses. Br. Med. J. 327 (7414), 557–560. https://doi.org/
10.1136/bmj.327.7414.557.
Ho, P., 2020. Leveraged debt investors push borrowers on ESG disclosures.
Hua Fan, J., Michalski, L., 2020. Sustainable factor investing: where doing well meets doing good. Int. Rev. Econ. Financ. 70 (July), 230–256. https://doi.org/
10.1016/j.iref.2020.07.013.
Huang, Danny Z.X., 2021. Environmental, social and governance (ESG) activityand firm performance: a review and consolidation. Accounting & Finance 61 (1).
Huber, B.M., Comstock, M., 2017. ESG reports and ratings: what they are, why they matter ? Oversight role: a practical guide. Corp. Gov. Advis. 25 (5), 1–12.
Husted, B.W., Sousa-Filho, J.M. de, 2019. Board structure and environmental, social, and governance disclosure in Latin America. J. Bus. Res. 102 (February 2018),
220–227. https://doi.org/10.1016/j.jbusres.2018.01.017.
Ismail, A.M., Latiff, I.H.M., 2019. Board diversity and corporate sustainability practices: evidence on environmental, social and governance (ESG) reporting. Int. J.
Financ. Res. 10 (3), 31–50. https://doi.org/10.5430/ijfr.v10n3p31.
Jitmaneeroj, B., 2016. Reform priorities for corporate sustainability: environmental, social, governance, or economic performance? Manag. Decis. 54 (6), 1497–1521.
https://doi.org/10.1108/MD-11-2015-0505.
Kaiser, L., Welters, J., 2019. Risk-mitigating effect of ESG on momentum portfolios. J. Risk Financ. 20 (5), 542–555. https://doi.org/10.1108/JRF-05-2019-0075.
Katsikas, Epameinondas, Rossi, Francesca Manes, Orelli, Rebecca L., 2017. Accounting change: integrated reporting through the lenses of institutional theory.
Towards Integrated Reporting. Springer, pp. 25–63.
Khan, A., Goodell, J.W., Hassan, M.K., Paltrinieri, A., 2021. A bibliometric review of finance bibliometric papers. Financ. Res. Lett., 102520
Khan, A., Hassan, M.K., Paltrinieri, A., Dreassi, A., Bahoo, S., 2020. A bibliometric review of takaful literature. Int. Rev. Econ. Financ. 69, 389–405.
Kim, W.S., Park, K., Lee, S.H., 2018. Corporate social responsibility, ownership structure, and firm value: evidence from Korea. Sustainability 10 (7). https://doi.org/
10.3390/su10072497.
Koo, J.E., Ki, E.S., 2020. Audit quality. Sustainability 12 (20), 1–16. https://doi.org/10.3390/su12208645.
Kunc, Martin H., Barnabè, Federico, Giorgino, Maria Cleofe, 2020. Mapping Circular Economy Processes in Integrated Reporting: A Dynamic Resource-Based
Approach. In: Songini, Lucrezia, Pistoni, Ana, Baret, Pierre, Kunc, Martin H. (Eds.), Non-Financial Disclosure and Integrated Reporting: Practices and Critical Issues, ,
34thtudies in Managerial and Financial Accounting. Emerald Publishing Limited, Bingley, pp. 83–106.
Lagasio, V., Cucari, N., 2019. Corporate governance and environmental social governance disclosure: a meta-analytical review. Corp. Soc. Responsib. Environ. Manag.
26 (4), 701–711. https://doi.org/10.1002/csr.1716.
Lai, A., Melloni, G., Stacchezzini, R., 2016. Corporate sustainable development: is “integrated reporting” a legitimation strategy? Bus. Strategy Environ. 25 (3),
165–177. https://doi.org/10.1002/bse.1863.
Landi, Giovanni, Sciarelli, Mauro, 2019. Towards a more ethical market: the impact of ESG rating on corporate financial performance. Social Responsibility Journal
15 (1), 11–27.
Li, Hao, Zhang, Xuan, Zhao, Yang, 2022. ESG and Firm’s Default Risk. Finance Research Letters. In press.
Limkriangkra, Manapon, Koh, SzeKee, B. Durand, Robert, et al., 2017. Environmental, Social, and Governance (ESG) Profiles, Stock Returns, and Financial Policy:
Australian Evidence. International Review of Finance 17 (3).
Lin, K.C., Dong, X., 2018. Corporate social responsibility engagement of financially distressed firms and their bankruptcy likelihood. Adv. Account. 43 (July), 32–45.
https://doi.org/10.1016/j.adiac.2018.08.001.
Lokuwaduge, C.S.D.S., Heenetigala, K., 2017. Integrating environmental, social and governance (ESG) disclosure for a sustainable development: an Australian study.
Bus. Strategy Environ. 26 (4), 438–450. https://doi.org/10.1002/bse.1927.
López-Illescas, C., de Moya-Anegón, F., Moed, H.F., 2008. Coverage and citation impact of oncological journals in the Web of Science and Scopus. J. Informetr. 2 (4),
304–316. https://doi.org/10.1016/j.joi.2008.08.001.
Lueg, K., Krastev, B., Lueg, R., 2019. Bidirectional effects between organizational sustainability disclosure and risk. J. Clean. Prod. 229, 268–277. https://doi.org/
10.1016/j.jclepro.2019.04.379.
Manita, R., Bruna, M.G., Dang, R., Houanti, L., 2018. Board gender diversity and ESG disclosure: evidence from the USA. J. Appl. Account. Res. 19 (2), 206–224.
https://doi.org/10.1108/JAAR-01-2017-0024.
Matos, P.V., Barros, V., Sarmento, J.M., 2020. Does esg affect the stability of dividend policies in Europe? Sustainability 12 (21), 1–15. https://doi.org/10.3390/
su12218804.
Maubane, Pat, Prinsloo, Andre, Rooyen, Nadia Van, 2014. Sustainability reporting patterns of companies listed on the Johannesburg securities exchange. Public
Relations Review 40 (2), 153–160.
Mervelskemper, L., Streit, D., 2017. Enhancing market valuation of ESG performance: is integrated reporting keeping its promise? Bus. Strategy Environ. 26 (4),
Minutolo, Marcel C., Kristjanpoller, Werner D., Stakeley, John, 2019. Exploring environmental, social, and governance disclosure effects on the S&P 500 financial
performance. Business Strategy and the Environment 28 (6), 1083–1095.
Miralles-Quirós, M.M., Miralles-Quirós, J.L., Gonçalves, L.M.V., 2018. The value relevance of environmental, social, and governance performance: the Brazilian case.
Sustainability 10 (3). https://doi.org/10.3390/su10030574.
Mohin, T., 2021. Can we finally standardize ESG standards? GreenBiz. 〈https://www.greenbiz.com/article/can-we-finally-standardize-esg-standards〉.
18
Mohmed, A., Flynn, A., Grey, C., 2019. The link between CSR and earnings quality: evidence from Egypt. J. Account. Emerg. Econ. 10 (1), 1–20. https://doi.org/
10.1108/JAEE-10-2018-0109.
Ng, Anthony C., Rezaee, Zabihollah, 2015. Business sustainability performance and cost of equity capital. Journal of Corporate Finance 34, 128–149.
Nofsingera, John, Varma, Abhishek, et al., 2014. Socially responsible funds and market crises. Journal of Banking & Finance 48.
Nollet, Joscha, Filis, George, Mitrokostas, Evangelos, et al., 2016. Corporate social responsibility and financial performance: A non-linear and disaggregated approach.
Economic Modelling 52.
Odriozola, María D., Baraibar-Diez, Elisa, 2017. Is Corporate Reputation Associated with Quality of CSR Reporting? Evidence from Spain. Corporate Social
Responsibility and Environmental Management 24 (2), 121–132.
Ortas, E., Gallego-Álvarez, I., Álvarez, I., 2019. National institutions, stakeholder engagement, and firms’ environmental, social, and governance performance. Corp.
Soc. Responsib. Environ. Manag. 26 (3), 598–611. https://doi.org/10.1002/csr.1706.
Paltrinieri, A., Hassan, M.K., Bahoo, S., Khan, A., 2019. A bibliometric review of sukuk literature. Int. Rev. Econ. Financ.
Parubchak, Ivan, Radukh, Nadiia, 2019. State Regulation Of The Development Of Corporate Social Responsibility In The Transformation Type Countries In Eastern
Europe. Baltic Journal of Economic Studies 5 (5), 121–127.
Pattnaik, D., Hassan, M.K., Kumar, S., Paul, J., 2020. Trade credit research before and after the global financial crisis of 2008–a bibliometric overview. Res. Int. Bus.
Financ. 54, 101287.
Rajesh, R., Rajendran, Chandrasekharan, et al., 2020. Relating Environmental, Social, and Governance scores and sustainability performances of firms: An empirical
analysis. Business strategy and the environment 29 (3).
Reckova, Dominika, Irsova, Zuzana, 2015. Publication bias in measuring anthropogenic climate change. Energy & Environment ⋅ 26 (5).
Reverte, Carmelo, 2009. Determinants of Corporate Social Responsibility Disclosure Ratings by Spanish Listed Firms. Journal of Business Ethics 88, 351–366.
Rezaee, Z., Tuo, L., 2019. Are the quantity and quality of sustainability disclosures associated with the innate and discretionary earnings quality? J. Bus. Ethics 155
(3), 763–786. https://doi.org/10.1007/s10551-017-3546-y.
Romano, M., Cirillo, A., Favino, C., Netti, A., 2020. ESG (Environmental, social and governance) performance and board gender diversity: the moderating role of CEO
duality. Sustainability 12 (21), 1–16. https://doi.org/10.3390/su12219298.
Romano, M., Cirillo, A., Favino, C., Netti, A., 2020. ESG (Environmental, social and governance) performance and board gender diversity: the moderating role of CEO
duality. Sustainability 12 (21), 1–16. https://doi.org/10.3390/su12219298.
Rytkönen, S., Louhiala-Salminen, L., 2014. “Sell the Sizzle” communicating environmental, social, and governance issues to institutional investors. Corp. Commun. 19
(4), 329–343. https://doi.org/10.1108/CCIJ-10-2013-0094.
Sadiq, M., Singh, J., Raza, M., Mohamad, S., 2020. The impact of environmental, social and governance index on firm value: evidence from Malaysia. Int. J. Energy
Econ. Policy 10 (5), 555–562. https://doi.org/10.32479/ijeep.10217.
Scott, W. Richard, 1987. The Adolescence of Institutional Theory. Administrative Science Quarterly 32 (4), 493–511.
Shahbaz, M., Karaman, A.S., Kilic, M., Uyar, A., 2020. Board attributes, CSR engagement, and corporate performance: what is the nexus in the energy sector? Energy
Policy 143 (April), 111582. https://doi.org/10.1016/j.enpol.2020.111582.
Sharma, P., Panday, P., Dangwal, R.C., 2020. Determinants of environmental, social and corporate governance (ESG) disclosure: a study of Indian companies. Int. J.
Discl. Gov. 17 (4), 208–217. https://doi.org/10.1057/s41310-020-00085-y.
Siew, R.Y. j, Balatbat, M.C. a, Carmichael, D.G., 2013. The relationship between sustainability practices and financial performance of construction companies. Smart
Sustain. Built Environ. 2 (1), 6–27. https://doi.org/10.1108/20466091311325827.
Singal, M., 2014. The link between firm financial performance and investment in sustainability initiatives. Cornell Hosp. Q. 55 (1), 19–30. https://doi.org/10.1177/
1938965513505700.
Stanley, T.D., 2001. Wheat from chaff: Meta-analysis as quantitative literature review. Journal of economic perspectives 15 (3).
Stellner, C., Klein, C., Zwergel, B., 2015. Corporate social responsibility and Eurozone corporate bonds: the moderating role of country sustainability. J. Bank. Financ.
59, 538–549. https://doi.org/10.1016/j.jbankfin.2015.04.032.
Stevens, P., 2019. Your complete guide to investing with a conscience, a $30 trillion market just getting started. CNBC.
Su, H.N., Lee, P.C., 2010. Mapping knowledge structure by keyword co-occurrence: a first look at journal papers in Technology Foresight. Scientometrics 85 (1),
65–79. https://doi.org/10.1007/s11192-010-0259-8.
Tamayo-Torres, Ignacio, Gutierrez, Leopoldo, Ruiz-Moreno, Antonia, 2019. Boosting Sustainability and Financial Performance: The Role of Supply Chain
Controversies. International Journal of Production Research 57 (11), 3719–3734.
Tamimi, N., Sebastianelli, R., 2017. Transparency among S&P 500 companies: an analysis of ESG disclosure scores. Manag. Decis. 55 (8), 1660–1680. https://doi.org/
10.1108/MD-01-2017-0018.
Tasnia, Mashiyat, AlHabshi, Syed Musa Syed Jaafar, Rosman, Romzie, 2021. The impact of corporate social responsibility on stock price volatility of the US banks: a
moderating role of tax. Journal of Financial Reporting and Accounting 19 (1), 77–91.
Torre, M.La, Mango, F., Cafaro, A., Leo, S., 2020. Does the ESG index affect stock return? Evidence from the Eurostoxx50. Sustainability 12 (16). https://doi.org/
10.3390/SU12166387.
UN, 2019. The Decade to Deliver, A Call to Business - CEO Study on Sustainability 2019. UNGC Strategy Accenture, 1–43. 〈https://www.accenture.com/us-en/
insights/strategy/ungcceostudy〉.
Velte, P., 2016. Sustainable management compensation and ESG performance - the German case. Probl. Perspect. Manag. 14 (4), 17–24. https://doi.org/10.21511/
ppm.14(4).2016.02.
Velte, P., 2017. Does ESG performance have an impact on financial performance? Evidence from Germany. J. Glob. Responsib. 8 (2), 169–178. https://doi.org/
10.1108/jgr-11-2016-0029.
Velte, P., 2019. Does CEO power moderate the link between ESG performance and financial performance?: A focus on the German two-tier system. Manag. Res. Rev.
43 (5), 497–520. https://doi.org/10.1108/MRR-04-2019-0182.
Venkataraman, S., Williams, R., 2020. ESG risks material in 33% of Moody’s 2019 private-sector issuer rating actions. Moody’s. https://www.moodys.com/research/
Moodys-ESG-risks-material-in-33-of-Moodys-2019-private–PBC_1218114#:~:text=%22The ESG issues cited in,risk as defined by Moody’s.%22&text=About
19%25 of rating actions,with the remaining 69%25 neutral.
Venturelli, A., Caputo, F., Leopizzi, R., Mastroleo, G., Mio, C., 2017. How can CSR identity be evaluated? A pilot study using a Fuzzy Expert System. J. Clean. Prod.
141, 1000–1010. https://doi.org/10.1016/j.jclepro.2016.09.172.
Widyawati, L., 2020. A systematic literature review of socially responsible investment and environmental social governance metrics. Bus. Strategy Environ. 29 (2),
Yu, E., yi, P., Luu, B., Van, 2021. International variations in ESG disclosure – do cross-listed companies care more. Int. Rev. Financ. Anal. 75 (September 2019),
101731 https://doi.org/10.1016/j.irfa.2021.101731.
Yamahaki, Camila, 2019. Responsible Investment and the institutional works of investor associations. Journal of Sustainable Finance & Investment 9 (2), 162–181.
Yu, E., yi, P., Luu, B.Van, Chen, C.H., 2020. Greenwashing in environmental, social and governance disclosures. Res. Int. Bus. Financ. 52 (September 2019), 101192
https://doi.org/10.1016/j.ribaf.2020.101192.
Zhao, C., Guo, Y., Yuan, J., Wu, M., Li, D., Zhou, Y., Kang, J., 2018. ESG and corporate financial performance: empirical evidence from China’s listed power generation
companies. Sustainability 10 (8), 1–18. https://doi.org/10.3390/su10082607.
19

2022 Khan

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

2022 Khan

Uploaded by

Copyright:

Available Formats

Research in International Business and Finance 61 (2022) 101668

Contents lists available at ScienceDirect

Research in International Business and Finance

ESG disclosure and Firm performance: A bibliometric and

E-mail address: [email protected].

2. Data and methodology

2.1. Data selection

Step 1 Articles appeared as a result of selected keywords 989

Average effect size is calculated as

3. Results and discussions

3.1. Number of publication

3.2. Literature coupling analysis

3.3. Cartography/keyword analysis

3.4. Co-authorship analysis

Fig. 1. Growth of literature.

Sustainability (Switzerland) 36 10.42 1.2

Fig. 2. Keyword analysis in the sustainable finance literature.

• The minimum number of documents an author is 3.

Corporate social responsibility 56

Dr. Gerhard Halbritter 3 31 1.11 University of Rosenburg

Fig. 3. Science mapping of co-authors.

3.5. Literature citation analysis

Environmental, social and governance

3.6. Countries activity analysis

3.7. Content analysis of research streams

1 United States 26 456 18 1.2

Fig. 4. Most active countries.

Fig. 5. Bibliographic coupling analysis.

3.7.1. Theoretical framework

3.8. Mata analysis of the research streams

3.8.1. Firm characteristics and ESG performance

3.8.2. Corporate governance and ESG performance

3.8.3. Financial materiality of ESG disclosure

(Chollet and Sandwidi, 2018) reported a negative association.

4.1. Firm characteristics and ESG performance

4.2. Corporate governance and ESG performance

4.3. Financial materiality of ESG disclosure

5. Conclusion and discussion

You might also like