The Influence of External Stakeholders in Corporate Environmental, Social and Governance (ESG) Disclosure: A Systematic Literature Review


Wong, Wai Khuen and Teh, Boon Heng and Tan, Siow Hooi (2022) The Influence of External Stakeholders in Corporate Environmental, Social and Governance (ESG) Disclosure: A Systematic Literature Review. In: Postgraduate Social Science Colloquium 2022, 1 - 2 June 2022, Online.

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Background - In recent years, an increasing number of firms have published sustainability reports to enable stakeholders to critically evaluate their commitment towards environmental, social and governance (ESG) factors while reviewing non-financial performance. However, the ESG disclosure among businesses remains weak despite the government’s ongoing effort to encourage industries in providing relevant disclosure about their ESG commitments and indicators. Policy makers should explore other novel approach beyond disclosure mandate policy intervention to improve ESG disclosure among firms, such as leveraging the external stakeholders’ distinctive sources of contextual pressure to influence corporate ESG disclosure decisions. Notwithstanding the growing interest in ESG, there remains limited systematic review of the literature concerning the influence of external stakeholders Purpose - The purpose of this research is: 1) to systematize the empirical literature related to the relationship between the influence of external stakeholders and ESG disclosure of firms; 2) To map and visualise external stakeholders’ influence on ESG disclosure of firms; and 3) To provide an overview of the current focus and limitation of the research regarding the influence of external stakeholders on ESG disclosure and identify future avenues of research. Design/methodology/approach - This review paper adopted a systematic literature review approach to investigate and synthesize evidence of the effect of stakeholder factors on ESG disclosure. The first stage of this methodology involved exploratory research to determine the database system and relevant search strings. The second stage introduced the inclusion criteria which identified 1,120 articles using Scopus and Google Scholar. The third stage introduced the exclusion criteria which resulted in the selection of 72 articles relevant to the present research as final sample for full-text analysis. Findings/Expected Contributions - This systematic literature review contributed to the scarce evidence concerning the pivotal involvement of 15 major stakeholder groups in demanding ESG credentials of companies. Based on results, a future research agenda was proposed to study the influence of specific external stakeholders on ESG disclosure across different regions under the mandatory and voluntary disclosure settings. Researchers should consider conducting survey among companies or investors with regards to corporate sustainability applications. This review paper also appealed to future researchers to develop appropriate formative index that relies on publicly available information to allow more stakeholders to make meaningful comparison among firms, sectors, and countries in terms of their ESG impact. Research limitations - This review paper is limited to two search systems with six (6) keywords that specifically focus on ESG disclosure related literatures under the prism of stakeholder concept. Originality/value - This study contributes to this contemporary field of research by bringing new insights on external stakeholders’ growing influence in corporate disclosure behaviour. The critical analysis revealed the changing research trend among scholars in gravitating from CSR towards the three pillars of ESG as well as identified future areas of research that could offer a richer basis in understanding corporate ESG disclosure behaviour.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: ESG, Disclosure, Sustainability Reporting, Stakeholder
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD2350.8-2356 Large industry. Factory system. Big business > HD2709-2930.7 Corporations. Including international business enterprises, diversification, industrial concentration, public utilities
Divisions: Faculty of Management (FOM)
Depositing User: Ms Suzilawati Abu Samah
Date Deposited: 12 Aug 2022 06:41
Last Modified: 19 Aug 2022 08:10


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