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Environment, social and governance (ESG) has taken on increased importance in recent years. This paper assesses the increasing importance of the social (“S”) dimension of ESG in the real estate space and the strategies being used by the leading real estate players to deliver this important aspect of ESG. This includes gender equality, cultural diversity, staff wellness, supply chain management and community engagement. It also indicates the need for an increased level of metrics in the S space for the effective delivery and external validation of the S dimension into real estate investment decision-making.

This research is based on a thorough understanding of the ESG environment in the real estate industry by the author. Best practice examples regarding the S dimension are given from the ESG/sustainability reports from real estate players in Australia who are leaders in the ESG space.

Excellent examples of the delivery of the S dimension are reported from the ESG/sustainability reports from the real estate industry. Whilst there is an increasing range of S information being reported in the real estate industry, there is a need for more metrics to effectively report this S information to indicate its key role in seeing the S dimension being delivered for the fuller integration of ESG at all levels of the real estate industry. The external validation of this S information will also take on increased importance going forward.

With ESG becoming a critical issue in the real estate sector, issues involved in the S space will take on increased significance. This is critical, as the elements of the S dimension such as gender equality, cultural diversity, staff wellness, community engagement and supply chain management are important aspects for an effectively functioning real estate industry. More metrics in the S space will be an important development to further expand the delivery and external validation of the S space of ESG.

This paper is the first paper to specifically address the need for more focus on delivering the S dimension of ESG in the real estate industry, highlighted by best practice examples from the real estate industry in Australia. This is a key issue for the real estate industry going forward at all levels to facilitate more effective real estate investment decision-making.

This study explores the contagion of greenwashing strategies among ESG mutual funds. It investigates how the greenwashing behaviors of peer funds within the same family influence a fund’s decision to engage in greenwashing. The research also examines the impact of greenwashing on genuine ESG funds and explores the mechanisms through which greenwashing strategies spread across ESG mutual funds.

This paper employs a two-stage least squares regression model with cross-fund returns standard deviation as an instrumental variable to disentangle the peer effects of greenwashing from family-level characteristics. The analysis incorporates various fund characteristics and introduces four contagion channels through which greenwashing may influence genuine ESG funds.

The study finds greenwashing behavior in ESG funds is positively influenced by similar practices within their fund family. Larger assets under management and older funds with higher management fees show resilience against greenwashing influences, while team-managed funds are more susceptible. Additionally, socially responsible investors struggle to distinguish between genuine and greenwashing ESG funds, which may contribute to the persistence of greenwashing practices.

This paper contributes to the literature by delineating the mechanisms of greenwashing contagion within ESG mutual funds. It also examines the demand-side incentives for adopting greenwashing strategies, offering insights into the implications for fund flows and investor behavior. This study is among the first to analyze the contagion effects of greenwashing strategies across an extensive network of ESG funds, enriching our understanding of the broader impacts of greenwashing in the context of socially responsible investing.

Addressing Environmental, Social and Governance (ESG) issues has become a critical aspect of business strategy. Since ESG has primarily focused on ratings and measures for reporting, there is a scarcity of methods to assist stakeholders in better comprehending corporate risk and addressing ESG-related issues and problems. The purpose of this paper is to propose a new model to narrow the critical gap.

This study is based on several well-known structural frameworks for managing risks and projects in various industries. Two case studies on topics related to environment (E) and social (S) responsibility are used to demonstrate the practical implementation of the CEPAR® model.

The CEPAR® model, a trademarked five-step methodology (the Challenge-Evaluation-Planning-Action-Review model) was developed by the International Chamber of Sustainable Development (ICSD). The method and guidelines are outlined for easier appreciation by stakeholders of corporations to analyze ESG-related challenges and dilemmas, then able to make principled decisions, take actions, and review the outcomes. Each phase of the new model adheres to the theoretical and practical frameworks for problem-solving and decision-making, emphasizing the iterate process of addressing challenges, evaluating materiality, planning actions, taking actions, and reviewing the outcomes.

The new model is applicable for business corporations and organizations seeking to gain insight and tackle crucial ESG issues, ultimately improving their short- and long-term decision-making and business opportunities.

This study aims to investigate whether the presence of women in the boardroom influences companies’ environmental, social and governance (ESG) performance. Furthermore, it examines whether the COVID-19 pandemic and family control affect the relationship.

This study uses nonfinancial firms listed on the Indonesia and Malaysia Stock Exchange during 2018-2021. Thomson Reuters’ database is used to collect the ESG scores. Using 312 firm-year observations, the authors apply multiple regressions and sensitivity testing to ensure the robustness of the results.

This study provides empirical evidence that the presence of women in the boardroom improves companies’ ESG and family control weakens the relationship. Meanwhile, there is no support on the moderating effect of the COVID-19 pandemic. The authors also conducted additional tests using ESG pillars (i.e. environment, social and governance pillars) as the dependent variable. The findings are robust to alternative samplings.

This research is limited to Indonesia and Malaysia, thus affecting the generalizability of the results to all developing countries. The sample size is relatively small due to data limitations related to the availability of ESG scores.

The findings of this study provide a basis for the government to establish mandatory regulations regarding sustainability performance. The positive relationship between women on boards and better ESG performance suggests that encouraging gender diversity in corporate leadership can improve sustainability practices. The government may consider implementing gender quota regulations to increase women's representation on corporate boards.

Shareholders can pursue investment portfolios in socially responsible companies, prioritizing ESG performance. In addition, investors should consider the presence of women in the company’s boardroom and whether family control exists when making investment decisions.

Overall, the originality and significance of this research lie in its comprehensive examination of the moderating factors, the inclusion of different governance systems in the sample, and the exploration of psychological aspects, contributing to a deeper and more nuanced understanding of the relationship between women on boards and ESG performance in the context of developing countries.

Aspects of ESG have become key considerations during many M&A transactions. This ranges from the type of assets a firm purchases, to evaluating the management practices of target firms, to incorporating ESG assessments into due diligence checklists and valuation models, to including specific ESG provisions in the sale and purchase agreement (SPA). Companies are increasingly concluding that a more robust focus on ESG in deal-making allows for greater value to be captured. This article identifies how companies can go about incorporating ESG throughout the deal process, from pre-deal analysis through post-transaction integration. A case example is provided.

This article provides key actions firms can take to incorporate ESG throughout the deal process, from pre-deal analysis through post-transaction integration. A case example from a large state-owned Norwegian utility is provided.

Various components of ESG have rapidly become key considerations in transactions. Firms that incorporate ESG across their M&A process, both pre- and post-deal can reap significant benefits. While firms that ignore ESG during M&A not only miss the upside potential, but also risk making damaging and costly deal mistakes.

M&A practitioners will find this article particularly useful, as many firms struggle with how to effectively include ESG in their transactions. This article provides M&A practitioners with key actions they can take to incorporate ESG throughout the deal process, from pre-deal analysis through post-transaction integration. A case example from a large state-owned Norwegian utility is provided.

The body of literature about M&A transactions is extensive, as is the recent writing about the importance of ESG to firms' costs, revenue, and societal impact. This article brings these two aspects together by providing M&A practitioners with key actions they can take to incorporate ESG throughout the deal process, from pre-deal analysis through post-transaction integration.

This study aims to investigate the influence of disclosing environmental, social and governance (ESG) factors on financial performance, taking into account the moderating effect of the COVID-19 pandemic.

A sample of the top 100 non-financial firms listed on the Bombay Stock Exchange, for the years 2019–2022, has been considered. Suitable panel regression models have been used to assess the impact of non-financial disclosure on accounting and market measures of firm performance. In addition, a panel data moderating effect model is used to assess the moderating impact.

The outcomes of the study partially favour the value-creation role of ESG disclosure. Specifically, the disclosure of already established ESG metrics, particularly social and governance aspects, positively impacts the market performance while environmental transparency negatively impacts the accounting performance. Of the three ESG components, only extended governance disclosure adds to market value. Results of the moderation effect reveal a significant impact of the pandemic on the ESG disclosure–financial performance relation. However, a more pronounced effect before the pandemic is observed. The results are robust to endogeneity.

This study sheds light on the financial consequences of ESG disclosure within the context of an emerging nation. This is done by using a novel holistic ESG reporting framework to obtain more accurate results. Furthermore, the study distinguishes itself by examining the long-term moderating influence of the unexpected COVID-19 crisis on the ESG disclosure–financial performance relation.

The mounting focus on environmental, social and governance (ESG) factors in business has sparked substantial curiosity in understanding the nexus between ESG and the companies’ strategic decisions. This study aims to investigate the influence of firms’ ESG disclosure scores on their dividend payout. Furthermore, it examines the nuanced dynamics of this relationship by exploring the moderating role of the country’s investor protection regulations and regulatory enforcement.

This study uses pooled ordinary least square regression with year, industry and country effects. It analyzes a balanced panel data set of 192 non-financial firms drawn from the primary equity indices of BRICS nations. This study examined the data of six years spanning 2015–2020.

The findings discover a significantly positive relationship between ESG scores and dividend payout ratio, conveying that firms with higher ESG scores allocate more of their profits as dividends. Furthermore, the finding reveals that country-level robust investor protection and effective regulatory enforcement mechanisms undermine the positive association between ESG ratings and payouts of dividends, suggesting that the ESG disclosure of firms operating in a setting characterized by enhanced investor safeguards and stricter regulatory oversight will exert less influence on their dividend decisions.

To the best of the authors’ knowledge, this is the first study to concentrate on the ESG–dividend nexus in the BRICS countries. Furthermore, this study used each country’s investor protection index and regulatory enforcement scores to comprehend the influence of country-level legal frameworks in shaping the relationship between ESG and dividend decisions, thus adding value to the existing literature on corporate sustainability.

This study aims to investigate the role of negative media coverage of environmental, social and governance (ESG) issues in deterring tax avoidance. Inspired by media agenda-setting theory and legitimacy theory, this study hypothesises that an increase in ESG negative media coverage should cause a reputational drawback, leading companies to reduce tax avoidance to regain their legitimacy. Hence, this study examines a novel channel that links ESG and taxation.

This study uses panel regression analysis to examine the relationship between negative media coverage of ESG issues and tax avoidance among the largest European entities. This study considers different measures of tax avoidance and negative media coverage.

The results show that negative media coverage of ESG issues is negatively associated with tax avoidance, suggesting that media can act as an external monitor for corporate taxation.

The findings have implications for policymakers and regulators, which should consider tax transparency when dealing with ESG disclosure requirements. Tax disclosure should be integrated into ESG reporting.

The study has social implications related to the media, which act as watchdogs for firms’ irresponsible practices. According to this study’s findings, increased media pressure has the power to induce a better alignment between declared ESG policies and tax strategies.

This study contributes to the literature on the mechanisms that discourage tax avoidance and the literature on the relationship between ESG and taxation by shedding light on the role of media coverage.

Drawing insights from institutional theory, this paper aims to examine whether and to what extent banks have reconfigured their management control systems (MCSs) in response to growing institutional pressures towards sustainability, understood as environmental, social and governance (ESG) issues.

The authors conducted an exploratory study at the three largest Italian banking groups to shed light on changes made in MCSs to account for ESG issues. The analysis is based on 12 semi-structured interviews with managers from the sustainability and controls areas, as well as from other relevant operational areas particularly concerned with the integration process of ESG issues. Additionally, secondary data sources were used. The Malmi and Brown (2008) MCS framework, consisting of a package of five types of formal and informal control mechanisms, was used to structure and analyse the empirical data.

The examined banks widely implemented numerous changes to their MCSs as a response to the heightened sustainability pressures from regulatory bodies and stakeholders. In particular, with the exception of action planning, the results show an extensive integration of ESG issues into the five control mechanisms of Malmi and Brown’s framework, namely, long-term planning, cybernetic, reward/compensation, administrative and cultural controls.

By identifying the approaches banks followed in reconfiguring traditional MCSs, this research sheds light on how adequate MCSs can promote banks’ “sustainable behaviours”. The results can, thus, contribute to defining best practices on how MCSs can be redesigned to support the integration of ESG issues into the banks’ way of doing business.

Overall, the findings support the theoretical assertion that institutional pressures influence the design of banks’ MCSs, and that both formal and informal controls are necessary to ensure a real engagement towards sustainability. More specifically, this study reveals that MCSs, by encompassing both formal and informal controls, are central to enabling banks to appropriately understand, plan and control the transition towards business models fully oriented to the integration of ESG issues. Thereby, this allows banks to effectively respond to the increased stakeholder demands around ESG concerns.

This article aims to analyse the relationship between the environmental, social and governance (ESG) score and the cost of capital of 600 large, mid and small capitalization companies across 17 countries that are component of the EURO STOXX 600 Index. By examining whether ESG has an impact on the cost of capital, this article contributes to the solutions to improve the impact of organizations and societies on sustainable development. The article further examines whether the effect is because of the environmental, social and/or governance components. In addition, the article analyses which WACC component (i.e. the cost of equity, the cost of debt, the beta or the leverage ratio) is affected. Furthermore, this article analyses whether a high ESG score can substitute for a weaker legal environment.

The results were obtained by using ordinary least squares panel data modelling to analyse the relationship between the ESG score and the cost of capital. The sample consists of companies that are part of the STOXX Europe 600 Index over the period 2018–2021, which is composed of 600 companies, including large, mid and small capitalization firms listed across 17 countries. The sample finally includes 1,960 firm-year observations.

Companies with a higher ESG score tend to have a lower cost of capital, but this relationship holds only for firms domiciled in countries with a weaker legal environment. In addition, these firms should not only increase their ESG score to create a more sustainable environment but also to reduce their cost of debt. Environmental and social factors have a significantly negative impact on the cost of capital only in countries with a weaker legal environment, while the governance component positively impacts the cost of capital by allowing firms to borrow more.

There is not yet a standardized taxonomy to define ESG, making the study dependent on commercial data providers.

The new insights can be used by companies domiciled in countries with weaker legal environments to reduce their cost of capital. The results also allow us to know on which components of the ESG score to focus. It can also help policymakers, specifically those in countries with a weaker legal environment, to provide incentives to further stimulate ESG investments and disclosure, thereby contributing to a more sustainable society.

To achieve the sustainable development goals put forward by the United Nations, it is important for firms to invest in ESG projects. It is nevertheless insightful to know whether these ESG investments, which are currently observed as a cost, also provide benefits to firms and in which countries. If firms clearly see the advantages of investing in ESG projects, they are likely to proactively engage in them.

This article is the first, to the best of the authors’ knowledge, to focus on 17 European countries, thereby capturing divergent legal environments. This setting allows us to answer the main novel research question, namely, whether the ESG score can act as a substitute for the legal environment in which the company is domiciled. The article also goes further than previous articles by examining whether the effect is because of the environmental, social and/or governance component and whether these impact the components of the weighted cost of capital, namely, the cost of equity, the cost of debt, the beta or the leverage ratio of the companies.