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ESG Indicator Metrics Used by Organisations To Assess The Degree of Sustainability in Companies

Sustainability is increasingly becoming a necessity for corporations due to changing perspectives around the world. In this scenario the following problematic issue has arisen: Which ESG indicators are used to evaluate companies? To answer this problem the following objective was set: map the ESG indicator metrics used by organisations to analyse sustainability in companies. To this end, an integrative literature review was conducted using the Web of Science database. The results of the research

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0% found this document useful (0 votes)
230 views12 pages

ESG Indicator Metrics Used by Organisations To Assess The Degree of Sustainability in Companies

Sustainability is increasingly becoming a necessity for corporations due to changing perspectives around the world. In this scenario the following problematic issue has arisen: Which ESG indicators are used to evaluate companies? To answer this problem the following objective was set: map the ESG indicator metrics used by organisations to analyse sustainability in companies. To this end, an integrative literature review was conducted using the Web of Science database. The results of the research

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IJAERS JOURNAL
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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International Journal of Advanced Engineering Research

and Science (IJAERS)


Peer-Reviewed Journal
ISSN: 2349-6495(P) | 2456-1908(O)
Vol-9, Issue-9; Sep, 2022
Journal Home Page Available: https://ijaers.com/
Article DOI: https://dx.doi.org/10.22161/ijaers.99.64

ESG indicator metrics used by organisations to assess the


degree of sustainability in companies
João Alvarez Peixoto1, Andréia Bem Machado2, Marc François Richter3

1Postgraduate Program in Science, Technology, Engineering and Mathematics (PPGSTEM), State University of Rio Grande do Sul, Brazil
2Department of Engineering and Knowledge Management, Federal University of Santa Catarina, Brazil
3Postgraduate Program in Environment and Sustainability (PPGAS), State University of Rio Grande do Sul, Brazil

Received: 27 Aug 2022, Abstract— Sustainability is increasingly becoming a necessity for


Received in revised form: 19 Sep 2022, corporations due to changing perspectives around the world. In this
scenario the following problematic issue has arisen: Which ESG
Accepted: 25 Sep 2022,
indicators are used to evaluate companies? To answer this problem the
Available online: 30 Sep 2022 following objective was set: map the ESG indicator metrics used by
©2022 The Author(s). Published by AI organisations to analyse sustainability in companies. To this end, an
Publication. This is an open access article integrative literature review was conducted using the Web of Science
under the CC BY license database. The results of the research indicate the instruments for this
(https://creativecommons.org/licenses/by/4.0/). analysis as: Bloomberg Sustainability Report, Compustat database,
Thomson Reuters EikonTM Report (ASSET4), MERCO Index, Kinder
Keywords—Environmental, governance,
Lyndenberg Domini (KLD) Report, Global Reporting Index (GRI) Report,
market, social, sustainability.
Global Engagement Services (GES), Sustainalytics database and in some
cases interviews with the organizations' managers. These instruments
measure ethical behavior, responsibility with employees, transparency
and good governance, contribution to the Community, and commitment to
the environment and climate change, and help assess companies on their
ESG performance.

I. INTRODUCTION ambitious development agenda for people and planet by


Sustainability can be defined as satisfying present 2030 [2]. The SDGs describe the biggest challenges and
needs without compromising the needs of future needs for human mankind of our time and the goals to
generations to meet theirs. It is structured on three pillars: address them. Achieving these goals requires collective
economic, environmental and social. In the corporate action between governments, private sector, civil society,
context, a sustainable business strategy seeks to have a comunities and dedicated individuals, needs to be linked
beneficial effect on one or both, contributing to the with the appropriate resources, innovative capacity, and
resolution of some of the most serious issues facing the relationships to promote implementation [3].
globe. Some of the global issues that sustainable business There are several compelling reasons for corporations
strategies help address include: climate change; natural to achieve social impact and participate with the SDGs in
resource depletion; gender inequality; fair working the context of organizations. Beyond the requirement to
conditions; racial injustice; income inequality; pollution; satisfy society's demands for increased responsibility and
circular economy; human rights issues [1]. transparency, fusing purpose with profit can produce a
Against this backdrop are the Sustainable Development special competitive edge to satisfy the demands of
Goals (SDGs) which represent an unprecedented global discriminating customers, investors, and staff [4].
consensus. They are the result of 193 countries joining Companies are compelled to integrate social impact
together in an agreement on a comprehensive and and SDG alignment into their core business by five main

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Peixoto et al. International Journal of Advanced Engineering Research and Science, 9(9)-2022

financial value drivers: 1) Generate new revenues by Thus, the main aim of this study is to map ESG
creating opportunities for market differentiation, expansion indicator metrics used by organisations to analyse
and growth, including innovating to access extremely sustainability in companies, in light of the bibliometric
promising markets that do not yet exist or are in their early review. To this end, a bibliometric search was carried out
days; 2) employer attractiveness for better recruitment and in the Web of Science database. The research is divided, in
retention; 3) increasing supply chain resilience by addition to this introduction, into five parts. The first part
increasing supply chain sustainability and operational is entitled introduction, the second presents the concepts
efficiency; 4) pique investor interest, increasing on ESG indicators, the third the methodological path, the
attractiveness to a wider range of investors; 5) be "ahead of fourth results and discussions, and finally the authors' final
the curve" in securing a license to operate, addressing considerations.
regulatory compliance and managing risk [5] [6].
Linked to the SDGs stands ESG (Environmental, II. ESG INDICATORS
Social and Governance), which refers to these three
The concern and responsibility of companies with
dimensions and criteria to measure the sustainability
environmental, social and management/governance aspects
impact of an investment in companies [7]. ESG criteria are
are constantly being questioned. It is a fact that there are
a set of standards for a company's behaviour used by
selfless companies that take care of these issues and
environmentally and socially conscious investors to select
include them in their business plan. But it is also a fact that
potential investments in particular companies.
other companies only address this issue if they see a value
Environmental standards take into account how a business
to their product and their corporate image and reputation.
safeguards the environment, including corporate policies
If the company uses resources, extracted from the same
that address climate change, for instance. Social factors
environment where it is located, for its manufacture, and at
look at the company's interactions with its customers,
the end returns waste to this same environment, it needs a
suppliers, employees, and the communities in which it
motivation to have a greater responsibility in this type of
operates. Governance deals with company leadership,
behaviour. If their actions, involving increased ESG
executive remuneration, audits, transparency, internal
responsibility, can be presented to the market as an added
controls and shareholder rights [8].
value to the product, then the market and consumers can
ESG criteria are increasingly clear in defining the value this as "good business" with a focus on
investment choices of large institutional investors, such as sustainability. But the value of this responsibility in ESG is
public pension funds and various types of mutual funds. not always easily recognized [12] [13].
The most recent US SIF Foundation report claims that at
The Fig. 1 presents a particular scenario depicting the
the end of 2019, investors held assets chosen based on
company's attempt to offer ESG responsibility value. And
ESG criteria for $17.1 trillion, up from $12 trillion just two
therein emerges the figure of "research firms" and
years earlier [9]. O investimento da ESG é às vezes
"financial analysis firms", which assist investors, through
referido como investimento sustentável, investimento
specialized ESG reports. There are also "consulting
responsável, investimento de impacto, ou investimento
companies", which help companies in their internal
socialmente responsável. To evaluate a company based on
processes to meet the expectations of investors and the
ESG criteria, investors look at a wide range of institutional
goods and consumer market.
behaviours and policies [10].
Environmental criteria should include corporate
climate policies, waste, energy use, natural resource
conservation pollution, and animal welfare. These criteria
can also help to assess any environmental risks that a
company may face and how the company is managing
these risks. Likewise, the social criteria analyse the
company's relations with stakeholders, including
employees, customers and suppliers. ESG governance
standards, meanwhile, ensure that a company employs
transparent and accurate accounting practices, looks for
integrity and diversity when choosing its leaders, and is
accountable to shareholders [11].
Fig. 1: ESG management in a company

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There are other reasons why ESG liability happens. In this way one cannot only quantify, but also qualify the
One very important reason is the company's image with performance of certain ESG criteria [18].
investors. These investors increasingly consider and As it is very difficult for a company to meet all ESG
prioritize companies' ESG responsibility in their criteria, it is suggested that some specific indicators are
assessments and decisions to invest in a given company. If prioritized, those that have the greatest impact on its
this occurs, it makes a lot of sense for companies to have a operations and that can add value to the company's image
governance policy, which considers ESG criteria as a in society. This is why it is important for a company to
central pillar of their management model, which can attract know the ESG criteria and indicators that the most
the investor and simultaneously be a company of reputable companies use. Investment funds or banks look
preference of conscious consumers [14]. at companies' ESG responsibility to measure their ESG
But it is not enough to be responsible in ESG, as it is risk [19].
necessary for the company to measure its degree of
responsibility. It is a way to demonstrate the effects of
III. METHODOLOGICAL APPROACH
actions and to manage its management. It is necessary for
the company to monitor and evaluate the different ESG To address the problem of this research, the present
indicators on an ongoing basis in order to measure and study is classified as exploratory-descriptive in order to
qualify each one of them [15]. When a company adopts describe the theme and increase the familiarity of
ESG concern in its management, it commits to meet researchers with the issue. The specific literature search
environmental, social and governance topics, generating method used was a systematic search in an online database
product value, since its commitment to ESG needs to be (Web of Science), for the period from 2004 to 2022,
disclosed to the market [16]. The Fig. 2 shows the three followed by a bibliometric analysis of the obtained data.
ESG pillars and the most important criteria for each one. Bibliometrics is a methodology from the information
sciences that uses mathematical and statistical methods to
map documents from bibliographic records stored in
databases [20].
It allows relevant calculations such as: number of
production per region; temporality of publications;
organization of research by area of knowledge; count of
literature related to the citation of the study; identification
of the impact factor of a scientific publication, among
Fig. 2: ESG Pillars and some criteria
others that contribute to the systematization of the research
result and the minimization of the occurrence of biases
Announcing to the market that a company manages its when analysing a certain topic.
waste, for example, does not automatically result in being For this type of analysis the present study was
recognised by the market. It is necessary to quantify or organized into three distinct stages: 1) planning, 2)
qualify this waste management in order to compare it with collection and 3) result. These stages converge to answer
other companies that are in the same business context. It is the study's guiding question, namely: “What are the ESG
therefore necessary to know how effective certain actions indicator metrics used by organisations to assess the
are in each ESG criteria, which it proposes to attend to, in degree of sustainability in companies?”.
order to manage its actions, investments and the
dissemination of results. Thus the need arises to establish
indicators to qualify or quantify the result of actions, in IV. RESULTS AND DISCUSSION
each ESG criteria [17]. The planning and research in the database took place in
Performance indicators are metrics used to measure May 2022. In this phase, some criteria were defined, such
and evaluate the performance of decisions and actions, as the limitation of the search to electronic databases, not
which a particular company is taking to achieve its ESG contemplating physical catalogues in libraries, due to the
goals. The objective is to understand how people or number of documents considered sufficient in the
equipment/machinery are performing in relation to the databases chosen for the present research. In the planning
different criteria, in order to know if they meet the scope, the Web of Science database was chosen as relevant
expected standard and if in fact they will be able to achieve to the research domain due to its relevance in the academic
the determined goals. A meaningful indicator should be field and its interdisciplinary nature, and also because it is
measurable and comparable, considering similar scenarios. one of the major databases of abstracts and bibliographic

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references of peer reviewed scientific literature, being number of publications, with a total of 140 publications, as
constantly updated. shown in Fig. 3.
Considering the research problem, the search terms
were defined during the planning phase, namely
"Companies" and "ESG" or "Environmental Social
Governance" and "indicator*". It is considered that the
variations of the expressions used in the search are
presented, in a larger context, within the same proposal,
since a concept depends on the context to which it is
related. Finally, the terms defined in the "title, abstract and
keyword" fields were used without temporal, language or
any other restriction that might limit the results.
Firstly, planning was conducted by elaborating the
Fig. 3: Time distribution of obtained publications
guiding question: "What are the ESG indicator metrics
used by organizations to assess the degree of sustainability
in companies?". To refine the search aligning it to the When analysing the 20 countries with the highest
research problem the search was conducted using the number of citations in the area, the United States stands
following terms: "Companies" and "ESG" or out with an average of 14% of total citations, a total of 786
"Environmental Social Governance" and "indicator*" citations, followed by Italy and the United Kingdom with
which originated a set of 620 documents found. From 13% (717) and 12% (698), respectively, according to Fig.
these, some types of documents were excluded such as: 4.
reference articles, conferences, ebooks and book chapters,
which resulted in a set of 475 indexed scientific articles
published in scientific journals in the temporal period from
2004 to 2022.
As a result of this survey, 475 papers were identified,
involving 1,372 authors, linked to 785 institutions in 65
different countries. The 5 main countries that have the
most publications on the subject are the USA (102
publications), Italy (93), England (67), China (59) and
Spain (59). In this set of articles, 1509 keywords were
used. Table 1 shows the results of this data collection in a
general bibliometric analysis. Fig. 4: Distribution of the number of citations of the
articles found in the bibliometric search by country
Table 1: Bibliometric data of the search
Topic Descrition Results
Retrieved documents were published in 206 different
Time period. Time period analysed. 2004 a 2022
scientific journals, 87 (25%) of which were published in
Document type. Retrieved 620 the journal "Sustainability", as shown in Fig. 5, which
documents/publications presents the 20 scientific sources (journals) with the
Scientific articles. 475 highest number of publications on the topic of "ESG" and
Additional Keywords. 1,509 "indicators".
information. Authors. 1,372 The second most relevant journal among the 20
indicated in Fig. 5, is "Corporate Social Responsibility
Number of authors per 2.46 And Environmental Management", with 20 documents. In
publication. sequence is, with 17 publications, "Business Strategy And
The Environment" on the subject matter of this study.
The eligible articles in the Web of Science database From the bibliometric analysis, based on the group of
were published between 2004 and 2022. In 2020 there was papers retrieved and the 1,509 keywords indicated by the
a significant increase in publications, with 110 authors, "performance" (performance) stood out with 119,
publications and in 2021 there was another increase in the "impact" with 99, "financial performance" with 95

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occurrences, "management" with 87 and "govenance" with answering the problematic of this study. Table 2 presents a
86, according to Fig. 6, concluding that the ESG pillar summary for each of the 14 articles.
"governance" is an area widely explored by the scientific Table 2: Summary of the selected articles
literature.
Authors Results
Nollet; Filis The authors seek to define the existing
and relationship between social performance
Mitrokostas (CSP - Corporate Social Performance)
[21] and financial performance (CFP -
Corporate Financial Performance), as
from the ESG Disclosure report issued by
Bloomberg Sustainability institution, with
the premise that potentiating the
consumers' socially conscious demands
and contributing with the company's
Fig. 5: Scientific journals with the highest number of financial performance, admitting of ESG
publications actions do not cause linear effects on
financial performance. The study
disaggregated ESG into its
subcomponents and added financial
indicators, resulting in a set to be
correlated, as follows: environmental
significance (ENV), social significance
(SOC), governance significance (GOV),
return on assets (RoA), return on capital
Fig. 6: TAG cloud (RoC), return over market shares (Stock
Returns), market risk assessment (Risk),
sales revenue (Sales) and expenses in
The 20 (twenty) most cited documents worldwide from research and development (R&D). The
the papers obtained through the database search are listed results of this linear model suggest that no
in Fig. 7. significant relationship can be reported
between social performance (CSP) and
financial performance (CFP), vis-à-vis
financial indicators RoA, RoC and Stock
Returns. In a non-linear relationship, this
relationship implies that social
performance pays off only after a certain
threshold of investments and
achievements in relation to financial
performance. In general, companies use
social performance as part of their
strategic planning in order to create
Fig. 7: Most cited documents globally additional value for their product.

After systematic analysis of these 20 (twenty) most Wang and The authors make a study of the
cited publications globally, the full reading of all articles Sarkis relationship between Corporate Social
was conducted in order to answer the research question: [22] Responsibility (CSR) management and
"What are the metrics of ESG indicators used by corporate financial performance, based on
organizations to assess the degree of sustainability in environmental, social and governance
companies?" Based on these 20 papers, 14 (fourteen) (ESG) data from Bloomberg
publications were chosen, for being of open access and for Sustainability and the COMPUSTAT
database, in a sample of the 500 largest

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green companies in the United States for Silva and (subject to systematic social taboos, moral
the years 2009 to 2013. Based on the Orsato [24] debates and political pressures, more
financial indicators of return on assets likely to cause social and environmental
(RoA) and Tobin's Q factor, which damage), is associated with social and
represents the ratio between the sum of governance performance in ESG, using
the market value of a company and its indicators from the database, Thomson
debts, by the replacement value of its Reuters EikonTM, considering 365
current assets, focusing on its stock, companies from Brazil, India, Russia,
confronted with the ESG indicators in South Africa, and China (BRICS), said
their sub-components, namely: emerging countries. ESG performance
environmental significance (ENV), social indicators were used and their subsets in
significance (SOC), governance environmental performance (ENV), social
significance (GOV). As results, the paper performance (SOC), performance in
presents that good CSR results help corporate governance (GOV), systematic
companies to achieve and maintain social risk index, company financial leverage
legitimacy, thus contributing to the index, cash flow, company size and profit
business environment and higher financial over assets. Results do pointt out that the
returns. And that a symbolic governance best environmental performance is
in CSR creates a legitimacy gap, resulting predominant in companies perceived as
in lower financial returns. Good financial sensitive or more likely to cause harm to
outcomes are related to good CSR society, confirming the premise that
outcomes. True legitimacy goals with real companies in sensitive sectors tend to
results will pay off more as financial disclose their ESG indicators to protect
performance, than token legitimacy their reputation. The systematic risk of the
efforts. company and its ESG performance is
described as an inverted U curve,
indicating a maximum value for ESG
Cucari; This study investigates the association
performance, leading the investor to have
Falco and between environmental, social and
to observe the opportunity for the
Orlando governance (ESG) indicators and board
investment. Overall, companies with
[23] diversity (BoD) in 54 Italian companies
better ESG performance tend to be less
for the period 2011 to 2014, based on
profitable.
Bloomberg Sustainability reports, in the
Italian context. The work disaggregated
ESG into its subcomponents, being: Cheng; The authors bring two studies that
environmental significance (ENV), social Green and investigate the effect of environmental,
significance (SOC), governance Ko social and governance indicators (ESG) in
significance (GOV). The results indicate [25] investors' decisions, varying the
that corporate social responsibility (CSR) company's strategy according to these
of the company is associated with the indicators, in its subcomponents, being
board, independent and committee. them: environmental significance (ENV),
Moreover, women on management boards social significance (SOC), significance in
are negatively correlated to CSR, while governance (GOV). A survey was applied
board age is not significant. Based on this to graduate students in Financial
study, shareholders and policy makers Analysis, in the role of non-professional
will have a deeper insight into the investors. Points out that investors
significant roles that board diversity is perceive the most important ESG
defined as a determinant of ESG indicators, and are more willing to invest
disclosure. in the company where ESG indicators
have greater strategic relevance. The
experimentation was a laboratory-based
Garcia; The study investigates whether the
experiment, in a controlled environment.
Mendes da financial profile of sensitive industries
Results indicate that non-professional

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investors attach greater importance to Wang; The authors used data from 331 Corporate
ESG indicators when making investment Hsieh and Social Responsibility (CSR) reports
decision and perceived importance Sarkis issued by US public companies in the
increases willingness to invest, in direct [28] period from 2009 to 2012, adopting the
relationship. The paper suggests that Fog, Kincaid and Flesch indices to
companies are likely to benefit both from measure CSR report readability and
ESG indicators perceived as strategically Bloomberg sustainability and Kinder
relevant and their assurance of Lyndenberg Domini (KLD) databases to
sustainability reports containing this measure ESG indicators and their
information. components, with the purpose of
examining the relationship between CSR
performance and CSR report readability.
Guerrero The authors do not directly point to a
Their results show a significant positive
and study on ESG indicators, but address the
relationship between CSR performance
Barraud- significance of human resource practices
and CSR report readability, indicating
Didier (HRPs), which make up the social (SOC)
that companies with stronger CSR
[26] and governance (GOV) indicators,
performance are more likely to have CSR
components of ESG. In order to test the
reports with higher readability.
effect of HRP on social and
Furthermore, the association of CSR
organizational performance and financial
reports readability with social
performance, 1,530 HR directors working
performance is stronger than with
in large companies in France were
environmental performance. Companies
questioned. The results show that there is
with good CSR performance are more
no significant correlation between high
likely to use plain language to disclose
involvement actions and financial
their CSR achievements, as a means of
performance. As well as there is no effect
emphasizing positive information.
on performance with regard to
remuneration. Communication and
training are strong points for improving Lokuwaduge The paper explores the extent of ESG
organizational results. This highlights the and reporting of 30 companies in the metals
importance of creating challenging and Heenetigala and mining sector listed on the Australian
enriched activities to manage high [29] Securities Exchange in the year 2013 to
engagement. determine the ESG indicators in use in the
Australian metals sector. It used the
indicators of the Global Reporting Index
Odriozola The aim of this paper is to test whether
(GRI). They verified environmental
and the quality of sustainability reporting in
(ENV), social (SOC) and governance
Baraibar- ESG influences subsequent corporate
(GOV) indicators. According to their
Diez reputation. Conducted on 22 Spanish
results, the motives of ESG reporting are
[27] companies listed on the Ibex35,
highly influenced by regulations. Some
representing the largest capitalization
ESG reports that may negatively
companies in the country, in the period
influence the legitimacy of the company
2006 to 2011. In this report, information
are not reported or are less reported,
was extracted on corporate reputation
which implies that legitimacy. Mining
(MERCO index), quality of information,
companies, as companies operating in a
company size, financial performance and
highly environmentally sensitive sector,
visibility, against disclosure of general
are reasonably trying to disclose the
ESG indicators. The result highlights the
information required by environmental
importance of the quality of ESG
regulators. Companies have used different
information disclosed to obtain corporate
measures to report ESG incidents and
reputation.
there is no uniformity in the measures
used. In general, ESG reporting is not
meaningful unless it is comparable, as

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there is no uniformity due to lack of Johannesburg Stock Exchange and the


reporting standards. Autralian Stock Exchange. The findings
point out that there is a link between ESG
risk, reputational damage and strategy
Velte The author presents a study of the impact
compliance, as there is evidence of
[30] of ESG performance, in each of its
increasing investor demand for
subsets, on financial performance (FINP),
information on ESG risk. The importance
conducted on a sample of 412 companies
of board involvement in integrating
listed on the German Prime Standard, in
environmental and social sustainability
the period from 2010 to 2014. The ESG
into corporate practices is highligted, as
indicators were obtained by Asset4 data
well as need for increased regulatory and
from Thomson Reuters, being the
stock exchange requirements to disclose
financial indicators used the Return on
both ESG risks and strategy. Further
Assets (RoA) and Tobin's Q. As results,
global discussion on the role of corporate
the paper points out that there is a positive
reporting in setting sustainable
impact of ESG performance on RoA, but
development goals is necessary.
no impact on Tobin's Q. Moreover,
analyzing the three different components
of ESG, governance performance has the Semenova This study explores the validity of MSCI
strongest impact on financial performance and Hassel ESG STATS (aka Kinder, Lydenberg and
(FINP) compared to environmental and [33] Domini Research & Analytics - KLD),
social performance. Thomson Reuters ASSET4 (ASSET4)
and Global Engagement Services (GES)
environmental ratings. The results suggest
Arayssi; The authors investigate the impact of
that KLD environmental strengths tend to
Dah and Jizi female participation on corporate boards
be a company-specific metric, while KLD
[31] on their ESG performance. ESG data
environmental concerns appear to capture
were extracted from Bloomberg
more industry attributes. ASSET4 and
Sustainability reports, in the period from
GES environmental metrics reflect more
2007 to 2012, with 100 companies. As
of an environmental opportunity
results, it points out that gender diversity
perspective and provide information
on company boards and management
about a company's future performance.
positively impacts ESG performance.
The study shows that the rankings have
ESG disclosure sends a positive signal to
common dimensions, but on the whole,
stakeholders regarding expectations of
they do not converge.
future company growth and financial
position. Female participation materially
elevates shareholder well-being. Better Husted and The authors examine how sustainability
decision making increases investors' Sousa-Filho project governance affects environmental,
perception of the legitimacy and [34] social and corporate governance (ESG)
competence of reported social activities, performance. They use information from
raising the signal of legitimacy and Sustainalytics and Bloomberg
significance of sustainability reporting. Sustainability databases, with 459
companies, in nine countries, over a range
from 2013 to 2016. Results suggest that
Adams The author investigates the relationship
there are comparative impacts of
[32] that exists in ESG risk management and
sustainability governance on ESG
governance and value strategy
performance. Collaborative governance
development. The paper also investigates
resulted in the higheste ESG performance
how corporate reporting mitigates these
benefits, followed by in-house and third-
relationships. The data is drawn from
party. Internal company sustainability
interviews with CEOs and directors of
projects are positively related to company
large companies listed on the
ESG performance.

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The aim of the review of the selected articles in the Adams [32]. Interviews with company
present study is to identify the ESG indicator metrics used chairmen and directors.
by organizations to assess the degree of sustainability in
companies. Table 3 presents the list of articles indicating
Semenova and Thomson Reuters EikonTM
the ESG indicator metrics used.
Hassel [33]. (ASSET4) Report;
Kinder Lyndenberg Domini
Table 3: ESG Indicator Metrics used by organizations in (KLD) Report;
the selected articles
Global Engagement Services
Authors ESG indicator metrics used (GES).
Nollet; Filis and Bloomberg Sustainability Report.
Mitrokostas [21].
Husted and Sousa- Sustainalytics Database;
Filho [34]. Bloomberg Sustainability Report.
Wang and Sarkis Bloomberg Sustainability Report;
[22]. Compustat Database.

Table 3 details that the ESG indicator metric provided


Cucari; Falco & Bloomberg Sustainability Report. by the "Bloomberg Sustainability Report" has the highest
Orlando [23]. recurrence among related articles, accounting for a total of
6 (six) papers. In second place comes the "Thomson
Reuters EikonTM Report (ASSET4)" and the format of
Garcia; Mendes da Thomson Reuters EikonTM "Interviews" with different sectors of companies, each
Silva and Orsato (ASSET4) Report. cited by 3 (three) articles as assessed in the present study.
[24]. The "Kinder Lyndenberg Domini (KLD) Report" was used
in 2 (two) cited papers.
Cheng; Green and Interviews with graduate
Ko [25]. students. Global Reporting Initiative (GRI) and Thomson
Reuters (Asset4) are analysis companies with guidelines
that use ESG indicators and have a greater focus on the
Guerrero and Interviews with HR directors of environment and context in which they operate, valued by
Barraud-Didier [26]. companies. the investment market and used by them for decision
making. They issue ESG reports and ratings of companies,
considering the environment and context in which they
Odriozola and MERCO Index.
operate. In additon, there are also economic/financial
Baraibar-Diez [27].
analysis companies, such as Sustainalytics and Bloomberg,
that use ESG indicators and focus on an analysis based on
Wang; Hsieh and Bloomberg Sustainability Report; corporate governance. KLD, on the other hand, uses a
Sarkis [28]. methodology more focused on the "Social" part of ESG.
Kinder Lyndenberg Domini
(KLD) Report. The Global Reporting Initiative (GRI) Report helps
companies and other organisations, through standards for
sustainability reporting, by providing them with the
Lokuwaduge and Global Reporting Index (GRI) common global language to communicate these impacts
Heenetigala [29]. Report. [35]. The GRI Report issues sustainability reports that
present a company's economic, environmental, social and
governance performance to society. It is the company's
Velte [30]. Thomson Reuters EikonTM
way of showing its impacts and measuring its actions,
(ASSET4) Report.
bringing increment of positive values to its image and
increasing brand loyalty, comparing the organizational
Arayssi; Dah and Jizi Bloomberg Sustainability Report. performance, with other organizations [36]. The Thomson
Reuters EikonTM Report (ASSET4), on the other hand,
[31].
provides market analysis, which aims to help professionals
make decisions to better manage their businesses. It

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investigates world economies regarding their laws, taxes, V. FINAL CONCLUSIONS


compliance, government, media, regulations and The search using the Web of Science database
technology [37]. It uses the records of ASSET4-ESG, identified 475 papers, which deal with ESG indicator
which has a database of information in this regard. metrics in companies. The number of citations of these
Sustainalytics is an international market analysis articles, by country, has the United States of America in
organization that measures ESG risk ratings, using first place with 786 citations, followed by Italy with 717
Sustainalytics database, measuring a company's exposure citations in the evaluation period, from 2004 to 2022. The
to sector-specific risks, and how well a company is 475 articles obtained in the bibliometric search are
managing them. It combines the concepts of management published in 206 different scientific journals, being in first
and exposure, to arrive at an absolute ESG risk place the journal "Sustainability" with 87 articles (25%).
assessment, using GRI guidelines [38]. The main aim of this systematic review was to map ESG
The Bloomberg Sustainability Report basically indicator metrics used by organisations to analyse
performs an economic/financial analysis that considers the sustainability in companies, in the light of a bibliometric
ownership and control structures of the company, the review.
composition and effectiveness of its board, the Regarding ESG indicator metrics used by
effectiveness of its incentive practices and the integrity of organisations, the following stand out: Bloomberg
its accounting, including any controversies that may have a Sustainability Report, Compustat database, Thomson
significant, negative impact on the value of the company. Reuters EikonTM Report (ASSET4), MERCO Index,
The method applied by KLD (Kinder Lyndenberg Domini Kinder Lyndenberg Domini (KLD) Report, Global
Report) aims to remove barriers to socially responsible Reporting Index (GRI) Report, Global Engagement
investment by providing research and support to the Services (GES), Sustainalytics database and in some cases
socially responsible investment market, with a view to interviews with the organizations' managers.
influencing corporate behaviour towards a fairer and more For future research, it is intended to map which
sustainable world. specific indicators are used by organisations to assess the
The MERCO index (Corporate Reputation Business implementation and degree of sustainability of ESG in
Monitor) is a corporate instrument of reference in Latin companies, and to compare between them, focusing on the
America for the evaluation of ESG criteria, which assesses metrics presented in the project study.
the reputation of companies, based on a methodology
consisting of six indices, plus twenty additional sources of
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