ESG METRICS: STANDARDIZATION AND REPORTING CHALLENGES IN EMERGING MARKETS

Abstract

In a competitive global business climate, organizations aim to make profits and achieve a competitive advantage through dynamic capabilities. Governance is critical in controlling business behavior to maintain sustainability and environmental protection, particularly in the aftermath of post-COVID investment movements. Corporate Social Responsibility (CSR) and corporate governance are inextricably linked, as both are required for ethical business practices and the implementation of Sustainable Development Goals (SDGs) and Environmental, Social, and Governance (ESG) standards. Companies are facing difficulty in attaining their objectives in the post-COVID era because of higher rules and changed investor behavior. The study intends to synthesize existing knowledge to examine the impact of governance on investor behavior. The theoretical framework is based on behavioral finance, agency theory, and institutional theory, and it provides insights into how governance affects investor behavior, risk, and returns. The dynamic influence of COVID-19 on the business environment is also considered. The method entails a rigorous literature assessment, which yielded 379 papers from the Scopus database. The findings suggest that excellent governance has a moderate impact on investment decisions, especially when combined with high CSR performance. Investors in the G7 prefer firms with strong corporate governance, emphasizing the importance of CSR transparency and its relationship to investor trust. The research has theoretical as well as managerial consequences. In theory, it broadens understanding of governance and the impact of CSR on behavior and investment patterns, hence offering new governance options. Managerially, it encourages the incorporation of ESG and corporate governance into corporate culture, resulting in increased trust among retail and institutional investors.