Anatomy of the chimera: Environmental, Social, and Governance ratings beyond the myth

Caterina Lucarelli and Sabrina Severini

Business Strategy and the Environment, 2024, vol. 33, issue 5, 4198-4217

Abstract: Environmental, Social, and Governance (ESG) ratings were developed to account for the multidimensional nature of the sustainability of firms. Research on ESG ratings suggests that working towards sustainability means engaging in a utopian effort, as in the chimera myth. We developed a conceptual framework of corporate activities that guides a systematic literature review based on 79 papers. Our analysis confirms that ESG ratings remain a black box, explored mainly from a purely monetary perspective and with contradictions on value created for companies and collective well‐being. Therefore, we deduce that research is still “chasing a chimera,” being this incomplete knowledge due to divergences in (1) theories, (2) regulations, (3) geographic and (4) corporate culture, (5) constructs/metrics, and (6) corporate attitude towards disclosure. Consequently, we identify research gaps and avenues for future research to foster corporations' responsible behaviours and socially responsible investing.

Date: 2024
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