Sustainable Business Development in the Concept of its ESG Responsibility

Elena N. Makarenko, Yulia G. Chernysheva, Irina A. Polyakova and Irina A. Kislaya

Chapter 18 in Climate-Smart Innovation:Social Entrepreneurship and Sustainable Development in the Environmental Economy, 2023, pp 285-298 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The chapter discusses issues related to the sustainable development of business in the current VUCA (variability, uncertainty, complexity, ambiguity) world. Business causes social, environmental, and economic problems because companies focus primarily on short-term financial results, increasing profits, and ignoring key market needs and conditions with the most significant impact on long-term consequences, including widely understood social or environmental issues. Therefore, the long-term and sustainable development of a business depends on the success of solving problems in the social, environmental, and economic sectors, i.e., on its Environmental, Social, and Governance (ESG) responsibility. Hence, ESG issues of business responsibility are particularly important for its sustainable development. Despite the importance of having an ESG responsibility for entrepreneurs, many of them are still uneager to implement it. There is a certain contradiction: on the one hand, the development of ESG responsibility is an important task allowing the companies to obtain additional value (as a result of expanding their obligations to the society in general and their collective of employees) being an established global trend, and many companies realize this. On the other hand, many organizations still do not want to realize the need to move from “business as a means of generating income” to the category of “ESG responsible entrepreneurs.” Based on this, the authors believe that to solve this problem, it is necessary to identify the root causes of low ESG responsibility of business, on the basis of which new methodological approaches should be sought that contribute to its improvement to ensure sustainable development of business. The research methodology should involve the study of the essence of social and environmental responsibility of business, the study of the essence and justification of the importance of ESG responsibility in its relationship with sustainable business development, identification of the reasons for the low level of ESG responsibility of business, and development of a set of measures to increase the ESG responsibility of the business based on meeting the needs of stakeholders.

Keywords: Climate-smart Innovation; Social Entrepreneurship; Sustainable Development; Environmental Economy; Green Economy; Environmental Marketing; Green Entrepreneurship Practices; COVID-19; Regional Economy; Natural Territory (search for similar items in EconPapers)
JEL-codes: L26 L31 Q01 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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