Environmental, Social, and Governance (ESG) factors have become central to modern investment strategies and corporate management. This paper reviews the role of ESG in investment decision-making and its impact on corporate financial performance (CFP) based on recent literature and meta-analyses. The findings generally indicate a positive relationship between strong ESG practices and corporate metrics such as ROA, ROE, firm value, and risk reduction, while portfolio-level investment returns tend to be neutral to slightly positive. Practical implications for investors and companies are discussed.
Gulsanam Kimsanova (Sun,) studied this question.