Data Sources

Sources from “Peking University Core”, “CSSCI”, and “CSCD” were selected in the CNKI database; literature types from “Academic journals”, “Dissertations”, and “Conference papers” were chosen; and the topic of “ESG” was focused on. A total of 837 pieces of literature were obtained, and after screening out commercial journals, irrelevant literature, and setting a limitation for the Chinese language, 295 pieces were excluded, resulting in a final selection of 542 pieces of local literature for the measurable analysis of ESG research. These articles were distributed between the years 2012 and 2023.

“ESG” was selected as the theme in the Web of Science Core Collection database, and the literature was refined based on criteria such as “Literature type: dissertation, proceedings, online publication, review paper” and “Language: English”. This yielded a total of 2,736 articles in English. After excluding 1,201 irrelevant articles, 1,535 articles on the measurable analysis of ESG research in English were obtained. These articles covered the period from 2007 to 2023.

Methodology

Substantial types of qualitative and quantitative literature review methods existed in the database. To illustrate, systematic literature reviews, meta-analyses, bibliometric analyses, and content reviews [12-15]. Among them, bibliometric analysis is a popular and rigorous method based on a quantitative approach for exploring and analyzing large volumes of scientific data, which enables us to unpack the evolutionary nuances of a specific field while shedding light on the emerging areas in that field [14]. Content analysis is a method to analyze qualitative data [16]. Using content analysis could further dig into the details of specific fields and facilitate exploring the rooted causes, future research trends, and research difficulties of each certain topic to get a more comprehensive understanding of the articles reviewed. According to Gaur and Kumar [17], the potential of content analysis lies in its combination with other methods. Based on that, this study employs a combination of bibliometric analysis techniques and content analysis methods to conduct research.

To analyze the research hotspots, core contents, and cutting-edge directions of local and global literature on ESG research comparatively, we imported the literature data from “2.1 Data sources” in the previous section into CiteSpace software. Firstly, we analyzed the ESG research hotspots intuitively through the visualization of keyword frequency. Secondly, we learned about the core contents of the ESG research field from keyword clustering. Thirdly, we clarified the evolution of different research clusters in the ESG field through the timeline view of keyword clustering. Finally, we summarized the frontier direction and future trend of ESG research through previous results.

Keywords Clustering Mapping Analysis

Based on the clarity of network structure and clustering, CiteSpace provides two metrics, the Modularity (Q-value) and the Silhouette (S-value), as the basis for us to judge the effectiveness of the mapping. In general, the Q-value is usually in the interval [0, 1), and a Q-value >0.3 implies that the clustering structure is significant, when the S-value is >0.7, the clustering is efficient and convincing, and when the S-value is >0.5, the clustering is reasonable [11]. Fig. 2a) and b) show the keyword clustering mapping of local and global literature in ESG research.

Fig. 2a) shows the local literature keywords clustering map with Q = 0.7912 and S = 0.9441, indicating that the clustering effect is significant and the clustering results are convincing. There are a total of six clusters of keywords in local literature on ESG research, namely: #0 “listed company”, #1 “corporate value “, #2 “green finance”, #3 “corporate governance”, #4 “green bond”, #5 “externality”.

Fig. 2b) shows the English literature keywords clustering map with Q = 0.5341 and S = 0.7984, indicating that the clustering effect of keywords in English literature is also significant and the clustering results are convincing. There are 10 clusters of keywords in English literature for ESG research, and compared with the clustering results of local literature, the keyword nodes of each cluster are more, and the relationship between the clusters is closer. The clusters are #0 “financial performance”, #1 “ESG disclosure”, #2 “socially responsible investing”, #3 “event study”, #4 “panel data”, #5 “institutional investors”, #6 “social capital”, #7 “default risk”, #8 “asset pricing”, #9 “ESG investing”.

Fig. 2.

Cluster visualization map of keywords in local and global literature.

Content Analyses of Keyword Clusters

After conducting an analysis, the ESG research literature in both English and Chinese can be categorized into four main areas. Firstly, ESG disclosure focuses on the current state of disclosure systems, standards, and regulations in the world. Many studies in this category utilize data from listed companies, such as conducting regression analyses to examine the impact of disclosure on various outcomes. Secondly, research on corporate financial performance explores the relationship among ESG dimensions (e.g., corporate social responsibility, corporate governance, organizational and management structure), corporate financial performance, and corporate value. This research draws upon theories such as stakeholder theory and sustainable investment theory, with enterprises as the primary subjects of analysis. The third category encompasses research on ESG investment, specifically sustainable and responsible investment. This area examines investment strategies that consider ESG factors and their impact on investment outcomes. Lastly, studies on corporate sustainable development strategy consider the influence of external issues on ESG development. This research examines the impact of environmental changes and environmental protection policies on industries and individual enterprises. A detailed inventory of the category division, cluster labels, and keywords can be found in Table 1 and Table 2.

ESG research in China has witnessed rapid development, aligning with the country’s dual-carbon goals [23]. While starting relatively late, the academic community has extensively explored various dimensions of ESG, including ESG investment, corporate financial performance, and corporate sustainable development strategy. The findings of these studies apply to the local context and stage of economic development. For instance: (1) Good ESG performance has been found to significantly enhance the enterprise value of listed companies. However, the impact of ESG performance on enterprise value exhibits heterogeneity, which is influenced by factors such as energy consumption status, nature of enterprises, and degree of marketization [7, 24]. (2) Institutional investors demonstrate preferences for ESG investments and are willing to tolerate, to some extent, the lower short-term operating performance of listed companies that exhibit strong ESG performance [7]. (3) Sustainability reporting complements financial reporting by incorporating externalities into the evaluation of corporate performance. It provides valuable insights into corporate sustainability prospects, offering a more comprehensive understanding of a company’s overall performance [25].

From the local perspective, it is evident that the relationship between corporate financial performance and ESG performance is complex. Currently, ESG disclosure by Chinese enterprises is predominantly voluntary, raising concerns about its completeness and effectiveness. Empirical research in this area still has space for further enrichment. To address these gaps, it is recommended to establish a robust and standardized ESG disclosure system. Moreover, future research can utilize cutting-edge technologies like big data and cloud computing to construct an enterprise ESG database. Additionally, it is crucial to establish a regulatory framework for ensuring data transparency. Initially, the focus can be on listed companies, gradually expanding to economic entities of varying scales as the quality and quantity of disclosure improve. This approach will enable the collection of transparent and effective ESG disclosure data, providing a solid foundation for future research on topics such as the ESG system, corporate financial performance, board organizational structure, and the intricate relationship between ESG performance and corporate financial performance. Moreover, this initiative will facilitate the iterative development of the disclosure mechanism and foster in-depth exploration of ESG concepts.

Corporate sustainability has emerged as a global trend, leading to a shift in corporate business models and management theories from a traditional shareholder-oriented approach to a stakeholder-oriented approach. This shift signifies that corporate operations now consider the interests of all stakeholders from multiple perspectives, aiming to maximize the social value associated with ESG issues. Notably, there is a significant alignment between stakeholder theories and ESG studies in the corporate dimension [26]. Several findings from ESG research in the English literature are worth highlighting. Firstly, it has been observed that the majority of ESG activities are not negatively correlated with firm efficiency, return on assets, and market value [26]. Secondly, corporate governance variables have been found to influence ESG disclosure. Specifically, a company’s CSR disclosure is associated with the presence of independent directors and a dedicated CSR committee. Moreover, it exhibits a negative correlation with the number of women on the board of directors and shows no significant correlation with the age of board members [27]. Thirdly, companies operating in the environmental sector are more likely to actively promote environmental sustainability [27]. Lastly, national institutions play a significant role in shaping companies’ ESG disclosure practices, including political, labor, and cultural institutions [28].

From a global perspective, the ESG disclosure system and rating system have undergone continuous change and growth, leading to improvements in the credibility and validity of related research data. Through keyword clustering analysis of the English literature, it is evident that the relationship between ESG development and corporate financial performance has received considerable attention from academics, with most studies concluding a non-negative correlation. Given the current significance and popularity of ESG, the research question no longer revolves around whether ESG can generate excess returns for companies. Instead, in the current era of shifting business and investment paradigms, factors such as climate change and public attitudes have become closely intertwined with the survival and success of enterprises and organizations. Consequently, institutional investors must incorporate ESG considerations into their decision-making processes. Future research should align with this evolving trend and focus on refining activity variables within the environmental, social, and corporate governance dimensions. It should investigate the complex relationship between these variables and ESG investment, disclosure, enterprise value, market efficiency, and other relevant segments in practical applications. Such research will provide valuable guidance for the development and implementation of ESG practices. Moreover, it has the potential to enhance the research and application value of ESG, aligning it with the evolving needs of companies and investors in the context of a changing business landscape.

Comparative Analysis of Core Content and Development Status

The keyword clustering mapping and content analysis of local and global literature reveal that ESG research can be categorized into four main areas, as presented in Table 1. However, there are differences in the level of refinement and focus between Chinese and English research due to different ESG development statuses, which can be observed in the following ways: (1) ESG information disclosure has emerged as a prominent research area in China, characterized by certain challenges that hinder its effectiveness. These challenges include issues of selectivity and credibility, inadequate policies, weak regulation, limited scope of disclosure entities, and relatively low levels of voluntariness. While, to some extent, some Western countries are witnessing rapid and continuous development in their disclosure systems. Notably, in the European Union, there is a gradual transition from voluntary to mandatory disclosure, indicating a significant shift in the nature of disclosure practices, which may be beneficial for further information disclosure and deeper empirical application [21].

(2) Presently, ESG research generally encompasses the three dimensions of environment, society, and corporate governance. However, the level of development differs between regions. The European Union, representing the global ESG market, may be shifting from high-speed to high-quality development. The development of ESG in China is still in its nascent stage, characterized by rapid growth but lacking full maturity. This can be attributed to several complex factors, including the imperfections within the disclosure system, which may give rise to concerns of greenwashing, as well as irregularities in ESG investment products. Nonetheless, it is worth noting that the availability of ESG information in China is experiencing significant expansion. (3) Differences in national economic conditions, including factors such as national industrial structure and industry diversity, as well as variations in social and cultural backgrounds, such as investment preferences, and the presence of specific ESG policies, contribute to the emergence of unique research focal points in different countries. In China, the interplay of factors such as the proposal of dual-carbon goals in 2020, the introduction of new ESG regulations in recent years, and the growing emphasis on green financial development have propelled the field of ESG research to the forefront. Consequently, there has been a notable surge in scholarly investigations exploring the intersection of ESG considerations with the dual-carbon policy and China’s green development trajectory. In the realm of global ESG policies, considerable emphasis has been placed on the integration of ESG principles within international organizations such as the United Nations Principles for Responsible Investment PRI (UNPRI), the International Organization for Standardization (ISO), the Global Reporting Initiative (GRI), and the Sustainability Accounting Standards Board (SASB). This tendency is often observed in existing literature, where the focus is primarily directed toward exploring the implementation and impact of ESG frameworks established by these international bodies.

(4) Local and global literature exhibit divergent research focuses when it comes to ESG investment. In Western countries, where there are relatively mature disclosure and rating systems, ESG investment research primarily revolves around exploring specific themes or sub-fields. These include ethical investment, which serves as the precursor to ESG responsible investment, corporate governance, market efficiency, and the implementation status of ESG investment. Conversely, local literature predominantly examines the “investment effects” resulting from enhancing ESG performance, particularly the influence on financing and attracting investment for economic entities. This aligns with the context of China’s opening policy [24].

Analysis of Keyword Clustering Timeline View

The timeline view outlines the relationship between the clusters and the historical span of literature in a particular cluster. It allows us to observe the main keywords between the clusters as well as the distribution time of the keywords and their connection relationships [11]. Fig. 3a) and b) show the timeline view of keyword clustering in local and global literature for ESG research.

Fig. 3.

Timeline view of keywords in local and global literature.

Fig. 3b) illustrates the relatively close relationship between the clusters of local literature on ESG. The four prominent clusters are labeled as #0 “listed company”, #1 “corporate value”, #2 “green finance”, and #3 “corporate governance”. The research interest in “corporate value” and “green finance” has remained consistent over time.

The high-frequency keyword nodes of the four hot clusters began to appear in 2015-2019 and had the first reference.

The research outcomes of the “listed companies”, “green finance”, and “corporate governance” clusters have increased since 2017. Moreover, the “listed companies” and “green finance” clusters initially focused on the investment field, but their core research areas differ. Representative literature from the “listed companies” cluster utilized disclosure data from A-share listed companies between 2012 and 2019 as the research sample. This literature empirically examined the impact of mandatory, imitative, and normative institutional pressures on the fulfillment of ESG responsibilities by listed companies, as well as the regulatory role played by dominant CEOs [29]. On the other hand, representative literature from the “green finance” cluster discussed the influence of corporate issuance of green bonds on debt contracts. The findings revealed that enterprises issuing green bonds experienced greater availability and lower borrowing costs for bank loans, leading to an increase in the long-term borrowing ratio [30]. In addition, the “corporate governance” cluster’s representative literature explored the relationship between the ESG performance of listed companies and their financial performance. The findings indicated a negative correlation between ESG performance and corporate financial performance [31]. Since 2019, the research results of the “corporate value” cluster have progressively increased. In representative literature, the impact of ESG rating performance on corporate value was analyzed from both book value and market value perspectives. The study examined the relationship between corporate value and ESG performance in terms of financing costs and market share [32].

From Fig. 3b), it can be observed that the connections between ESG literature clusters in English are closer compared to those in Chinese, and there are a greater number of keyword nodes. Most of the high-frequency keyword nodes appeared between 2010 and 2019. The research hotspots are mainly concentrated in #0 “financial performance”, #1 “ESG disclosure”, #2 “socially responsible investing”, #3 “event study”, #4 “panel data”, and #5 “institutional investors”. The time span of the ten clusters is extensive and continues to the present day, indicating that foreign ESG research is highly active and ongoing.

The high-frequency keyword nodes of the six hot clusters began to appear in 2010-2015 and had the first reference.

The “financial performance” cluster exhibits the highest number of high-frequency keyword nodes, indicating extensive research activities since 2010. Notably, a highly cited study within this cluster explores the relationship between CSR strategy and improved financing channels, investigating whether the exceptional performance of CSR initiatives leads to better access to funding [33]. Similarly, the “socially responsible investing” cluster and the “event study” cluster have witnessed an increase in research output since 2010. A notable study within the “socially responsible investing” cluster suggests that ESG ratings or scores can reflect both fundamental information about companies and investor preferences. The study utilizes large datasets to examine the costs and benefits associated with responsible investment [34]. On the other hand, a highly cited study within the “event study” cluster emphasizes that a company’s response to ESG ratings depends on the manager’s belief in the tangible benefits of favorable ratings and their alignment with corporate strategy [35]. The “panel data” cluster has seen an increase in research output since 2011. A prominent study within this cluster collects ESG disclosure scores and governance information from the Thomson Reuters database. It employs multiple panel data regression models and sensitivity tests to investigate the impact of board composition on ESG reporting in Gulf states [36]. Moreover, the “ESG disclosure” cluster and the “institutional investors” cluster have gradually witnessed an increase in research output since 2013. A highly cited study within the “ESG disclosure” cluster explores the influence of institutional theory and legitimacy theory on ESG disclosure practices, examining the extent of impact on environmental, social, and corporate governance dimensions [28]. In the “institutional investors” cluster, a notable study investigates institutional investors’ awareness of climate risks. The findings indicate that institutional investors tend to prioritize risk management over divestment strategies [37].

Comparative Analysis of Research Development Stages

The developmental trajectory of ESG research can be broadly categorized into three stages based on the current research timeline and progress. In the context of local literature, these stages are defined as follows: the early stage spans from 2012 to 2016, the middle stage encompasses the years 2017 to 2020, and the current stage covers the period from 2021 onwards. As for English literature, which stands on a global scale, the stages are delineated as follows: the early stage spans from 2007 to 2012, the middle stage covers the years 2013 to 2018, and the current stage extends from 2019 to the present. This classification is illustrated in Table 3.

During the early phase of ESG research conducted in China, considerable scholarly attention was devoted to the exploration of investment philosophies and investor preferences. This was followed by a progression towards utilizing disclosed information from publicly listed companies as the primary research samples. Concurrently, ESG investigations expanded to include information disclosed by other entities, with a specific emphasis on scrutinizing the relationship between ESG performance and corporate valuation. Subsequently, research in the middle stage prominently featured studies on green finance. Drawing upon the principles of green finance theory, significant advancements were achieved in elucidating the association between green credit and various dimensions such as sustainable development, risk management, and corporate performance. In the present stage of ESG research, the focus has broadened to build upon the insights garnered during the middle stage, particularly highlighting corporate risk management within the context of carbon neutrality as well as the social and environmental value of ESG considerations. Research has increasingly concentrated on the internalization process of externalities encountered by corporations. It has been acknowledged that a virtuous cycle can only be established through the internalization of ESG costs and the consequent induction of changes in corporate behavior.

In the early stages of ESG research conducted in the English language, the primary focus was on examining the correlation between CSR performance and financial outcomes, alongside the investigation of responsible investment practices. As research evolved into the middle and current stages, there was a heightened emphasis on the exploration of green finance, encompassing elements such as green bonds. These studies delved deeply into the intricate relationships between environmental disclosure, ESG investing, corporate social performance, ownership structure, financial performance, and corporate valuation. Additionally, the impact of various operational variables within the environmental, social, and governance dimensions on the sustainable development of enterprises has been rigorously examined.

The evolving trajectory of ESG research indicates a discernible pattern and predictability. The research focus has transitioned from theoretical exploration to investment practices, with a shift in research direction from the early stage emphasis on CSR to encompassing environmental disclosure and corporate financial performance. Presently, a comprehensive research framework has emerged, guided by the theory of social responsibility, supported by data-driven information disclosure, and centered around corporate financial performance. However, ESG research lacks a consolidated theoretical framework and clear research guidance, resulting in a relatively fragmented landscape. This fragmentation may be attributed to two main factors. Firstly, ESG research is significantly influenced by externalities related to the environment, society, and corporate governance. The wide range of research topics and large volumes of papers make it challenging to systematize the research efforts. Secondly, scholars hold different perspectives on the application value of ESG, leading to divergent research directions. Some scholars believe that the application value of ESG lies in guiding investors towards sustainable investments, which are expected to generate long-term high-value returns (e.g., Qiu and Yin [8]). On the other hand, some scholars view ESG as a sustainable concept that promotes comprehensive decision-making in enterprises, considering environmental, social, and corporate governance factors. This approach enhances corporate environmental awareness and fosters socially sustainable development (e.g., Huang [38]).