ESG in Corporate Finance

Luca Di Simone ()
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Luca Di Simone: Università Cattolica del Sacro Cuore, Dipartimento Science Economiche e Sociali

A chapter in Topics in Corporate Finance, 2025, pp 63-121 from Springer

Abstract: Abstract Environmental, Social, and Governance (ESG) factors have transitioned from being peripheral considerations to central components in corporate valuation frameworks. This literature review provides a comprehensive examination of how ESG influences corporate finance through theoretical and empirical lenses. Drawing on stakeholder theory, signaling theory, and the resource-based view (RBV), and other approaches, this review explores the pathways through which ESG initiatives affect financial performance, risk mitigation, and market perceptions. Regional and sectoral variations are analyzed, alongside challenges such as ESG data inconsistency and rating divergence. Every section of this review concludes with recommendations for future research and practical implications for integrating ESG into corporate finance

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-032-07046-3_3

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DOI: 10.1007/978-3-032-07046-3_3

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