A Survey Paper on Corporate Environmental Responsibility

A Survey Paper on Corporate Environmental Responsibility
Course: ECONGR5120_001_2022_3 - Research in Economics
Date: 22/10/2022
Table of Contents 1.0 INTRODUCTION.. 3 2.0 PRESENT RELATED CORPORATE ENVIRONMENTAL RESPONSIBILITY. 4 2.1 Climate Change and Financial Markets. 4 2.2 Impact of Risks and Uncertainties on Mitigation Measures. 5 2.3 Investors and the ESG Rating. 5 2.4 Effectiveness of ESG Rating. 7 2.5 Climate Finance. 7 3.0 DO INVESTORS CARE ABOUT FIRMS’ ENVIRONMENTAL PERFORMANCE?. 8 3.1 Environmental risks and Investment decisions. 8 3.2 Institutional Investors and Environmental Performance and The Impact of the ”Big Three.”. 9 3.3 Corporate Green Bond and Green Signal 12 3.4 Environment Consciousness or Marketing Strategy?. 15 3.5 Index Funds and Monitoring Inefficiency. 17 4.0 ESG CRITERIA AND “GREENWASHING.”. 18 4.1 Divestment and ESG rating. 18 4.2 Green Innovation and ESG rating. 25 4.3 Environmental Policy and Limited Liability Protection. 27 5.0 NEW RESEARCH DIRECTION.. 28 5.1 Research Question and Motivation. 28 5.2 Literature. 30 5.2.1 Sustainable investment equilibrium.. 30 5.2.2 The product market outcome of ESG investment. 30 5.2.3 ESG-innovation studies. 30 5.3 Research Design. 31 5.3.1 Data. 31 5.3.2 Methodology. 31 6.0 CONCLUSION.. 32 Bibliography. 33 Appendix. 38   1.0 INTRODUCTION
Climate change is among the key concerns today, with companies and governments worldwide seeking better ways to control climate change. Industries and businesses significantly negatively impact the environment due to their massive consumption of natural resources and emissions of hazardous pollutants. Many businesses pursue environmental sustainability not only as a moral obligation but also as a business opportunity in the present day. Corporate social responsibility evaluates a company's performance based on how well it manages its social and environmental impacts and financial performance. Most businesses recognize that sustainability is a market necessity and not a choice. To further their interests, businesses frequently distort the truth about sustainability. This report focuses on the environmental aspect of ESG (Environmental, Social, and Governance) by researching existing literature that covers corporate environmental responsibility to propose a new research direction in the end. The paper begins by reviewing three of the most frequently asked questions about corporate environmental responsibility. For each question, there is a summary that highlights the strengths and weaknesses of papers that addressed these questions.
Some businesses work to reduce their contribution to climate change by reducing energy consumption, producing clean energy, or offsetting their greenhouse gas emissions with carbon credits. Another instance of circularity is the capture and subsequent use of carbon or methane. Business leaders, including capital providers, can work to preserve shared value in the coming decades to keep chaos from causing harm to all of us. It necessitates a comprehensive benefit-cost analysis that accounts for an uncertain future with unequally distributed risks. The best financiers, operators, inventors, and decision-makers will, presumabl...