Environmental, Social and Governance (ESG) Development Status and Outlook

Abstract

In recent years, environmental, social and governance (ESG) factors have been increasingly emphasized by investors and corporations. ESG refers to the environmental, social and governance performance of a corporation, reflecting its long-term development potential and sustainability. This paper summarizes the current state of research on ESG development in the industry and academia, and provides an outlook on the future development of ESG. It is found that ESG development in the real world has problems such as insufficient corporate cognition of ESG management, lack of uniform standards for ESG rating system, unsolicited and unstandardized corporate ESG disclosure, and lagging development of ESG investment. Academic ESG research mainly focuses on the study of the relationship between ESG performance and financial performance, the study of the relationship between ESG performance and enterprise value, and the study of the relationship between ESG performance and financing costs and financing constraints. In the future, ESG development should focus on improving the cognitive level of enterprises on ESG management, promoting the unification and standardization of ESG rating system, encouraging enterprises to disclose ESG information proactively and in a standardized manner, enriching ESG investment products and services, and expanding the scale of ESG investment.