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This paper aims to examine the consistency between firms’ stakeholder-friendly responses to the COVID-19 pandemic and their environmental, social and governance (ESG) ratings. Consistent firms are those with high prior ESG ratings that actively support stakeholders during the COVID-19 crisis.

The authors use data from JUST Capital, which tracks Russell 1000 firms’ actions in response to the pandemic, to examine the relationship between pre-pandemic ESG ratings and their COVID responses towards employees, customers and communities. The authors also analyse the impact of firms’ consistency between pre-pandemic ESG ratings and stakeholder-friendly COVID responses on ESG ratings and stock returns.

This study finds that firms with higher pre-pandemic ESG ratings are more likely to support their stakeholders during the pandemic. The authors also find that firms with high ESG ratings before the pandemic experience a decline in their ESG ratings if they do not actively support their communities during the COVID-19 crisis, although insufficient employee/customer support does not impact their ESG ratings. Finally, the authors find that firms with higher pre-pandemic ESG ratings that continue to uphold their ESG commitments through community assistance during the pandemic achieve higher stock returns compared to inconsistent firms.

The results reveal gaps in how comprehensively ESG agencies assess firms’ crisis responses, highlighting areas for rating improvements. The findings contribute to sustainable development by revealing the importance of firms upholding their ESG commitments during crises to maintain stakeholder trust and drive long-term value creation.

The findings underscore the need for responsive, transparent ESG rating processes to support the integration of sustainability considerations into corporate practices and investment decisions, particularly during evolving societal expectations during crises.

To the best of the authors’ knowledge, this study is the first to investigate how pre-pandemic ESG ratings explain firms’ stakeholder-friendly responses during the COVID-19 pandemic and analyse the integration of these responses and pandemic risks into ESG ratings during the crisis.

This paper aims to investigate the relationship between corporate environmental, social and governance (ESG) ratings and leverage manipulation and the moderating effects of internal and external supervision.

The authors draw on a sample of Chinese non-financial A-share-listed firms from 2013 to 2020 to explore the effect of ESG ratings on leverage manipulation. Robustness and endogeneity tests confirm the validity of the regression results.

ESG ratings inhibit leverage manipulation by improving social reputation, information transparency and financing constraints. This effect is weakened by internal supervision, captured by the ratio of institutional investor ownership, and strengthened by external supervision, captured by the level of marketization. The effect is stronger in non-state-owned firms and firms in non-polluting industries. The governance dimension of ESG exhibits the strongest effect, with comprehensive environmental governance ratings and social governance ratings also suppressing leverage manipulation.

Firms should strive to cultivate environmental awareness, fulfil their social responsibilities and enhance internal governance, which may help to strengthen the firm’s sustainability orientation, mitigate opportunistic behaviours and ultimately contribute to high-quality firm development. The top managers of firms should exercise self-restraint and take the initiative to reduce leverage manipulation by establishing an appropriate governance structure and sustainable business operation system that incorporate environmental and social governance in addition to general governance.

Policymakers and regulators should formulate unified guidelines with comprehensive criteria to improve the scope and quality of ESG information disclosure and provide specific guidance on ESG practice for firms. Investors should incorporate ESG ratings into their investment decision framework to lower their portfolio risk.

This study contributes to the literature in four ways. Firstly, to the best of the authors’ knowledge, it is among the first to show that high ESG ratings may mitigate firms’ opportunistic behaviours. Secondly, it identifies the governance factor of leverage manipulation from the perspective of firms’ subjective sustainability orientation. Thirdly, it demonstrates that the relationship between ESG ratings and leverage manipulation varies with the level of internal and external supervision. Finally, it highlights the importance of governance in guaranteeing the other two dimensions’ roles by decomposing overall ESG.

This paper aims to examine the relationship between environmental, social and governance (ESG) performance and systemic risk sensitivity of Chinese listed companies. From the consumer loyalty and investor structure perspectives, the relationship between ESG performance and systemic risk sensitivity is analyzed.

Since Morgan Stanley Capital International (MSCI) ESG officially began to analyze and track China A-shares from 2018, 275 listed companies in the SynTao Green ESG testing list for 2015–2021 are selected as the initial model. To measure the systematic risk sensitivity, this study uses the beta coefficient, from capital asset pricing model (CPAM), employing statistics and data (STATA) software.

The study reveals that high ESG rating companies have high corresponding consumer loyalty and healthy trading structure of institutional investors, thereby the systemic risk sensitivity is lower. This paper reveals that companies with high ESG rating are significantly less sensitive to systemic risk than those with low ESG rating. At the same time, ESG has a weaker impact on the systemic risk of high-cap companies than low-cap companies.

The study helps the companies understand the influence of market value on the relationship between ESG performance and systemic risk sensitivity. Moreover, this paper explains explicitly why ESG performance insulates a firm’s stock from market downturns with the lens of consumer loyalty theory and investor structure theory.

The paper provides new insights on the company’s ESG performance that significantly affects the company’s systemic risk sensitivity.

Environmental, social and governance (ESG) factors have become increasingly important in investment decisions, leading to a surge in ESG investing and the rise of sustainable investment assets. Nevertheless, challenges in ESG disclosure, such as quantifying unstructured data, lack of guidelines and comparability, rampantly exist. ESG rating agencies play a crucial role in assessing corporate ESG performance, but concerns over their credibility and reliability persist. To address these issues, researchers are increasingly utilizing machine learning (ML) tools to enhance ESG reporting and evaluation. By leveraging ML, accounting practitioners and researchers gain deeper insights into the relationship between ESG practices and financial performance, offering a more data-driven understanding of ESG impacts on business communities.

The authors review the current research on ESG disclosure and ESG performance disagreement, followed by the review of current ESG research with ML tools in three areas: connecting ML with ESG disclosures, integrating ML with ESG rating disagreement and employing ML with ESG in other settings. By comparing different research's ML applications in ESG research, the authors conclude the positive and negative sides of those research studies.

The practice of ESG reporting and assurance is on the rise, but still in its technical infancy. ML methods offer advantages over traditional approaches in accounting, efficiently handling large, unstructured data and capturing complex patterns, contributing to their superiority. ML methods excel in prediction accuracy, making them ideal for tasks like fraud detection and financial forecasting. Their adaptability and feature interaction capabilities make them well-suited for addressing diverse and evolving accounting problems, surpassing traditional methods in accuracy and insight.

The authors broadly review the accounting research with the ML method in ESG-related issues. By emphasizing the advantages of ML compared to traditional methods, the authors offer suggestions for future research in ML applications in ESG-related fields.

This study examines whether international tourism demand in the Visegrád countries is influenced by countries' risk rating on environmental, social and governance (ESG) factors, as non-economic factors relating to ESG risks have been ignored by previous researches on determinants of international tourism demand.

The study investigates panel data for the Visegrád countries comprising the Czech Republic, Hungary, Poland and Slovakia over the period 1995–2019. Recently developed techniques of augmented mean group (AMG) and common correlated effects mean group (CCEMG) estimators are employed so as to take care of cross-sectional dependence, nonstationary residuals and possible heterogeneous slope coefficients.

The regression estimates suggest that besides economic factors, the perception of international tourists regarding ESG risk is another important determinant of international tourism demand in the Visegrád countries. The study also established that income levels in the tourists' originating countries are the most critical determinant of international tourism demand to the Visegrád countries.

The research outcomes of the study include the need for the Visegrád countries to direct policies towards further mitigating their ESG risks in order to improve future international tourism demand in the area. They also need to ensure exchange rate stability to prevent volatility and sudden spikes in the relative price of tourism in their countries.

Corporate leadership and environmental, social and governance (ESG) performance are closely intertwined, as effective corporate leadership can facilitate the achievement of strong ESG performance. Thus, the purpose of the study is to investigate the impact of corporate board leadership on the ESG performance of listed firms.

The sample has been taken from the listed firms of the Nifty 500 index spanning the period of 10 years from 2012 to 2022. Dynamic panel data estimations are applied through a fixed effect model.

The findings of this study revealed that board size, board independence and board qualification have a significant positive influence on ESG performance. It is evident that good corporate governance practices can positively influence ESG performance by fostering accountability, transparency and ethical behavior, as well as better integrating ESG considerations into their decision-making processes and ensuring that ESG issues are prioritized at the highest levels of management. Further findings also revealed that chief executive officer (CEO) duality has a significant negative relationship with ESG performance, which goes against the belief of stakeholder theory.

It has practical implications for policymakers, as they can enact new regulations pertaining to the CEO’s position in the organizations to make corporate governance responsible for improved sustainability and ESG performance.

There are very few studies analyzing the impact of corporate board structure on ESG performance related to emerging markets. Thus, this study contributes to that literature by using the methodology GMM panel data for the first time as per our knowledge

This paper has a dual purpose: to produce a clear panorama of microfactors behind the implementation of environmental, social and governance (ESG) in emergent economies, and to identify long-term versus short-term implications of ESG and its impacts on sustainable transformation. In particular, the paper investigates the moderating role of ownership concentration on ESG performance and firm value relationship in Southeast Asia during 2010–2022 and COVID-19 period 2020–2022.

By adopting stakeholder and agency theory lenses, this study analyzes 591 nonfinancial listed companies in Southeast Asia from 2010 to 2022 with 2,673 firm-year observations. Data has been collected from Refinitiv and companies' annual reports. Ordinary least squares (OLS) and two-stage least squares (2SLS) estimators are main strategies.

During 2010–2022, the links between ESG performances and firm value are negative. Ownership concentration negatively moderates the nexus between governance pillar and firm value in both short and long run. In COVID-19, ownership concentration also plays an antagonistic moderating role in ESG combined score-firm value association. The results show a crucial role of blockholders in Southeast Asian firms and their strong support to ESG in conquering crisis period, suggesting that managers develop balancing mechanisms in making ESG-related decisions; policymakers and regulators improve effective control instruments with strong legal systems and enhanced law enforcement to protect minority shareholders.

This is the first study to test the connection between ESG performance, ownership concentration and firm value in Southeast Asia that has: (1) utilized different proxies of firm value and ownership concentration in robustness tests, (2) controlled heteroskedasticity defects, (3) eliminated companies in the Banking and Finance sector from the sample to avoid distorting the conclusions and (4) empirically verified the driven role of governance pillar in ESG performance and ownership concentration reversely moderated the impact of governance pillar on firm value.

We explore how sustainable management education (SME) can help prepare future leaders to manage crises effectively. Precisely, the intricacies of articulating moral and economic imperatives for businesses in a manner that engages students in sustainable behavior are a serious challenge for SME. We study how to integrate reminders of moral and economic imperatives in a socially responsible investment (SRI) stock-picking simulation created for SME.

Adopting an experimental design, we analyzed how the reminders affected the average environment social governance (ESG) integration in the portfolios of 127 graduate students in finance over a twelve-week period.

Our results show how essential it is to balance the two imperatives. The highest level of sustainable investment is attained when utilizing both reminders.

Our findings have practical implications for implementing and organizing SME in business schools to educate responsible leaders who are able to effectively manage crises. Learning responsible management is most effective when students are exposed to the inherent tension between moral and economic imperatives. Hence, our findings corroborate the win-win conception of SME.

No management decision study has experimentally measured the effects of SME practices on students' actual behavior. Our research fills this gap by complementing previous studies on the effectiveness of teaching practices, first by drawing on behavioral sciences and measuring changes in students' actual sustainability behavior and second by introducing moral and economic imperatives into an innovative teaching resource (TR) dedicated to SME.

The banking industry faces increasing scrutiny from stakeholders regarding its environmental and social impacts, given its crucial role in fostering economic growth. Banks have been encouraged to adopt environmental, social and governance (ESG) practices to mitigate risks and safeguard their reputation. However, the effectiveness of ESG sensitivity within the banking industry is contingent upon ownership and structural factors. The extent to which banks can integrate ESG considerations into their operations and decision-making processes may vary based on their ownership structures. Therefore, this study aims to examine if the impact of ESG on the performance of Indian banks varies between private and public sector banks.

The study employs six years of panel data from two separate samples of 12 private sector banks and 10 public sector banks in India. It utilises fixed and random effect estimation techniques with robust standard errors to derive accurate and reliable econometric results.

The main findings of this study reveal intriguing insights into the relationship between ESG factors and bank performance, considering the influence of ownership structure. For private sector banks, the ESG composite score, particularly the social dimension, negatively impacts financial performance. However, there is a contrasting positive effect on efficiency. In contrast, public sector banks demonstrate a positive and significant association between the environmental score and return on equity and non-performing assets.

The findings highlight the need for tailored strategies that align with ownership structure to achieve sustainable financial and societal outcomes in the banking industry. Furthermore, it emphasises the need for private-sector banks to streamline their ESG initiatives, especially in the social dimension, to mitigate negative impacts on their financial performance.

This study introduces a novel dimension by addressing the “one size fits all” bias in prior research that overlooked bank ownership differences when examining the impact of ESG factors on bank performance.

The aim of this study is to identify environmental, social and governance (ESG)-focused funds that can effectively uphold ethical principles while also delivering competitive financial returns by evaluating the performance of 24 well-established exchange-traded funds (ETFs). The study also compares the performance of four widely recognized ETFs representing NASDAQ (ticker: QQQ), S&P500 (SPY), Dow Jones (DIA) and Russell 2000 (IWM) with the sample of 24 ESG funds.

This paper utilizes four complementary measures, namely Sharpe, Sortino, Omega and Calmar ratios, to assess the risk-adjusted return performance of ETFs, with a particular emphasis on extreme downside risk.

The findings indicate that ESG-focused ETFs can predominantly outperform DIA and IWM in the last five years (1 November 2018–22 March 2023). However, when compared to QQQ and SPY, only ICLN, SUSA and DSI consistently delivered competitive risk-adjusted returns. The performance of DSI and SUSA is almost equivalent to QQQ and SPY even during the last ten years.

The paper conducts a risk-return analysis of alternative ESG investment funds, suggesting that not all ETFs are created equal and that careful selection is vital for achieving different investment objectives. It is imperative to recognize that past performance is not a reliable indicator of future outcomes, requiring consideration of other factors in the post-evaluation phase.

The study provides evidence to support the “doing well while doing good” hypothesis, indicating that competitive returns are achievable while also engaging in socially responsible investment.

This study fills a vital gap in the literature on ESG investment by highlighting that the choice of funds stands as the primary factor responsible for the conflicting findings by previous studies.