ESG and Corporate Value Creation: Progress, Reflections, and Future Directions

Abstract

In recent years, the concept of Environmental, Social, and Governance (ESG) has gained increasing attention from both academia and industry, emerging as a focal point in research and practice. ESG practices play a critical role in corporate strategic transformation, risk management, and decision-making optimization. However, existing research on ESG remains at a relatively early stage. This paper reviews the origins and evolution of ESG, its core definitions, theoretical foundations, and the mechanisms through which ESG influences non-financial value. It further examines empirical studies on the financial implications of ESG and the relationship between ESG and corporate strategic decision-making. The review reveals several limitations in the current literature, including the lack of unified evaluation standards, the prevalence of “greenwashing” in ESG practices, insufficient consideration of industry and regional differences, and the neglect of in-depth reflections on ESG implementation. Finally, the paper offers a forward-looking perspective on the future development of ESG research.