Analysis of ESG in Building New Business Models

Abstract

According to researchers, environmental, social, and governance (ESG) has been discussed extensively, specifically as a socially responsible investment. Regardless of this exploration, researchers have failed to critically examine the concept of ESG integration and how it impacts the transformation of business models from conventional to more sustainable ones. The chapter utilized a meta-analysis to critically examine previous research findings. The data collection method involved analyzing qualitative and quantitative research that allowed deriving generalized conclusions about ESG and building sustainable business models based on the existing literature. ESG integration benefits the pertinent firms. The advantages are apparent with the study showing that ESG integration results in positive returns on equity and assets. Organizations with strong ESG performance are ranked as best-performing firms and have a lower cost of debt. This benefit means that firms should focus on ESG integration and building new business models resulting in improved financial performance.