Four Strategies for Improving the Efficiency of ESG Activities: The Case Study of Walmart

Hwy-chang Moon, Wenyan Yin and Minji Hong

Chapter 7 in The Competitiveness of Nations 2:Government Policies and Business Strategies for Environmental, Social, and Governance (ESG), 2023, pp 123-155 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Despite the extensive existing studies on environmental, social, and governance (ESG) issues, many of them are insufficient in explaining the financial implications of ESG activities of firms. Moreover, there is inconsistency in the relationship between ESG and firms’ financial performance. Some argue that ESG has a negative impact on a firm’s financial performance, while others argue the opposite. To fill the gap in the literature, we identify the root causes of this inconsistency in the existing studies and highlight the significance of the strategic approach in conducting ESG activities that will lead to coevolutionary results between firms and society/environment. In this respect, we suggest an analytical framework of ESG strategies by extending Porter and Kramer’s (2011) strategies for creating shared values (CSV). Moreover, by studying the case of Walmart’s ESG engagement and discovery of value creation opportunities from ESG activities, we identify the importance of an effective and win-win approach from the sustainability perspective. The four ESG strategies help firms transform the view on ESG activities from a cost burden to opportunities for higher value creation.

Keywords: National Competitiveness; Government Policy; Business Environment; Firm Strategy; Locational Advantage; Competitive Advantage; International Business; Russia-Ukraine War; Environmental; Social; and Governance (ESG); Corporate Social Responsibility (CSR); Corporate Social Opportunity (CSO); Creating Shared Value (CSV) (search for similar items in EconPapers)
JEL-codes: F1 F13 F23 (search for similar items in EconPapers)
Date: 2023
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