What ESG Has Not (Yet) Delivered: Proposition of a Framework to Overcome Its Hurdles

Abstract

Environmental, Social, and Governance (ESG) issues have gained increasing prominence in corporate agendas and the academic literature. However, significant hurdles remain regarding its effectiveness, standardization, and authenticity. This work aims to develop a framework containing recommendations to overcome these hurdles and enable more effective ESG practices. To this end, a systematic literature review (SLR) was adopted as the research method to provide an organized and in-depth overview of the current state of the art in the ESG literature and its main gaps. Through the SLR, 35 hurdles were identified, organized into five axes: integration, assessment, stakeholders, territoriality, and sectorization. Building on these hurdles, a framework comprising 39 recommendations was proposed, targeting the ESG key players: companies, rating agencies, guideline developers, academia, and other stakeholders. As a theoretical contribution, this work articulates previously fragmented knowledge on ESG, helping to bridge the identified research gap, outlining pathways for further and deeper reflections, especially in relation to the persistent decoupling between expected and achieved results in sustainability. As practical contributions, it helps avoid negative impacts for ESG key players, leading them to achieve more realistic assessments, adopt better practices, and increase comparability across initiatives, supporting ESG to reach greater effectiveness, enhance assessment metrics, increase the consistency of reporting, broaden stakeholder engagement, and strengthen institutional mechanisms.