Will ESG Integrating into Corporate and Investment Practices Lead to Negative Impact on Returns?

DOI

10.2991/978-94-6463-888-2_53How to use a DOI?

Keywords

ESG; Environmental; Social Responsibility; Corporate Governance; Climate Change; Sustainable Development; IRR - Internal Rate of Return; MOIC - Multiple on Invested Capital; Private Equity Fund; ESG Fund

Abstract

Integrating Environmental, Social, and Governance (ESG) principles into corporate and investment practices does not necessarily lead to negative financial returns. In fact, evidences suggesting that companies with strong ESG performance may exhibit better long-term financial performance and risk^[1] management. Several studies indicate that organizations emphasizing sustainability and responsible business practices can experience benefits such as improved operational efficiency, reduced regulatory risks, enhanced brand reputation, and increased access to capital. Additionally, investors are increasingly recognizing the importance of ESG factors in assessing the long-term viability and resilience of companies. It’s crucial to note that the relationship between ESG practices and financial performance^[2] is complex and context-dependent. As a fact, Successful implementation of ESG initiatives requires a strategic and integrated approach, aligning the principles with the specific goals and values of organization. In summary, while the initial implementation of ESG practices may involve some costs, the potential benefits, both in terms of financial performance and broader societal impact, can outweigh these initial investments over the long term and bring sound return in both financial return and overall social economic benefits.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Chenglin Song
PY  - 2025
DA  - 2025/12/03
TI  - Will ESG Integrating into Corporate and Investment Practices Lead to Negative Impact on Returns?
BT  - Proceedings of the 2025 7th International Conference on Economic Management and Cultural Industry (ICEMCI 2025)
PB  - Atlantis Press
SP  - 545
EP  - 555
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-888-2_53
DO  - 10.2991/978-94-6463-888-2_53
ID  - Song2025
ER  -