Title: Contours of Contemporary Research: Perspectives Across Disciplines
Chief Editors: Dr. S. Durga, Dr. S. Sathyapriya, and Dr. V. A. Jane
ISBN: 978-81-17787-25-0
Chapter: 13
DOI: https://doi.org/10.59646/880/13
Authors: Dr. P.K. Dhanalakshmi, and L. Janaki
Abstract
The importance of environmental, social and governance (ESG) issues has taken a dramatic shift from the margins of corporate reporting to the core of today’s management. In addition to demonstrating financial performance, there is a growing expectation that organisations will be seen to be operating responsibly in the environment, to have social legitimacy, to be held to ethical standards, and to be resistant to sustainability-related risks. But in most organisations, ESG remains largely a disclosure or compliance or reputation management concern. This type of orientation restricts its strategic possibilities. In this conceptual chapter, the authors propose the ESG–Strategy Nexus (ESGSN) as a holistic approach that can be used to move ESG beyond reporting to strategic management. It outlines a roadmap for organisations to follow as they move from having an awareness of ESG issues, to identifying and prioritising their material ESG issues, to embedding those issues into their organisation, to building ESG intelligence, to informed decision making, to improving their organisational resilience, to strengthening their stakeholder value and finally to sustainable value creation. In the chapter, the authors demonstrate that ESG adds real value to organisations when environmental, social and governance data becomes strategic information, is built into resource decisions, innovation, risk management, stakeholder engagement and managerial decision-making. Conceptualisation of enabling conditions of this pathway is responsible leadership, ESG governance, digital capability, organisational culture and stakeholder engagement. The chapter also highlights the difference between disclosure and integration of ESGs, and proposes the notion of Strategic ESG Intelligence as an organisational competency to translate data related to sustainability into anticipatory and decision-relevant insights. The result is a framework that brings together the concepts of ESG and strategic management, stakeholder theory, and dynamic capabilities and organisational resilience, which helps to advance research in emerging management. It believes the future of ESG is not about the ever more sophisticated sustainability reporting but about organisations that can turn environmental and social concerns into strategic adaptability, stakeholder legitimacy and sustainable value for the long term.
Keywords: ESG, strategic management, sustainable value creation and sustainability strategy.