Relationships between ESG Disclosure and Economic Growth: A Critical Review

Round 1

Reviewer 1 Report

The authors aim to investigate the relationship between ESG disclosure and economic growth on which the previous literature is non existent. Despite the undoubted need to facilitate the transition to a more sustainable future from an environmental, social and governance point of view, the impact of this transition on economic variables and general well-being cannot be underestimated. The promotion of ESG practices in fact discourages polluting economic activities, whose role in society, however, can be fundamental for human well-being and for the economy. At the same time, with the approach of 2030 it is particularly interesting to investigate what may be the possible post-transition scenarios (where the transition will be reached).

However, the paper discusses several aspects of ESG disclosure, ESG strategies, SRI investments and ESG performance through a critical review of the literature on these issues but without a precise framework and a logical sense that leads to answering the research question. If the topic investigated is very interesting, the work should adopt a more suitable and robust methodology to connect and analyze the topics. Therefore, if the intention and the idea is admirable, the arguments adopted are not presented in organic, linear and coherent way with respect to the objective. I therefore believe that the paper is not ready to be published and requires a higher methodological effort and organization of the contents.

Further recommendations and suggestions for the future

The article speaks exclusively of ESG. However, you should check that there is not something existing about CSR, or at least you could expand the literature by also investigating the relationship between CSR and economic growth. Here are some interesting papers on the subject.

·       Sharma, E., & Sathish, M. (2022). "CSR leads to economic growth or not": an evidence-based study to link corporate social responsibility (CSR) activities of the Indian banking sector with economic growth of India. Asian Journal of Business Ethics, 11 (1), 67-103.

·       Chang, J. J., Chen, J. H., & Tsai, M. F. (2022). Corporate social responsibility, social optimum, and the environment-growth tradeoff. Resource and Energy Economics, 101311.

·       Inekwe, M., Hashim, F., & Yahya, S. B. (2020). CSR in developing countries – the importance of good governance and economic growth: Evidence from Africa. Social Responsibility Journal.

·       Škare, M., & Hasić, T. (2016). Corporate governance, firm performance, and economic growth – theoretical analysis. Journal of Business Economics and Management, 17 (1), 35-51.

 The literature on the link between stock performance and ESG variables can be expanded. Here are some indications.

 

·        La Torre, M., Mango, F., Cafaro, A., & Leo, S. (2020). Does the esg index affect stock return? evidence from the eurostoxx50. Sustainability, 12(16), 6387.

·        Kumar, S., Baag, P. K., & SK, V. (2021). Impact of ESG integration on equity performance between developed and developing economy: evidence from S and P 500 and NIFTY 50. Empirical Economics Letters, 20(4), 01-16.

·        Shanaev, S., & Ghimire, B. (2022). When ESG meets AAA: The effect of ESG rating changes on stock returns. Finance Research Letters, 46, 102302.

 

Paragraph 2.4.1 is called Kenan Institute's (KI) model; however, for the entire paragraph we talk about the "model of Private Enterprises", without ever mentioning the Kenan Institute again, except in the introduction of the paper. It would therefore be appropriate to mention the KI within the paragraph or, alternatively, change the name of the paragraph.

 

Paragraph 3 talks about SRI, which is interesting; however, the question of economic growth is somewhat lost. This, in my opinion, leads the paragraph to be partially out of context. The discussion could be broadened by adding something more consistent with the objective of the article.

For example Dam, L., & Heijdra, B. J. (2011). The environmental and macroeconomic effects of socially responsible investment. Journal of Economic Dynamics and Control, 35 (9), 1424-1434.

Author Response

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Author Response File: Author Response.pdf

Reviewer 2 Report

The topic is interesting and very relevant to the current context, moreover, the review paper has wider theoretical and practical applications. The authors have put their best efforts to execute this paper. However, I have the following reservations and suggestions for the sake of improvement of the undertaken study:

1) The logical sequence of the abstract should be as 1) objectives, 2) methodology, 3) Findings, 4) conclusion and 5) implications. Thus, the authors should also rewrite the abstract in this sequence. The authors should mention the analysis techniques in the methodology, After the findings conclusion, and then please describe important implications. 

2) The authors did not establish the motivation, significance, and novelty of the undertaken study. The authors are suggested to improve this important factor in the "Introduction" section. The background of the research should also be presented in the section.

3) The literature should be presented in a proper heading, should be separated from the introduction, should be presented in an audit form, and should be linked with the objectives of the current paper.

4) The discussions section provides the opportunity for the authors to sell their idea to the readers. The discussions are separated from the conclusions section, and it should be complemented by the previous literature.

5) The conclusion should be added after the discussions section, the conclusion is always one step ahead of the findings. 

6) The practical, theoretical and societal implications should be discussed after the conclusion, and in light of the conclusion and discussions. 

7) Minor spelling and grammatical mistakes should be improved.

Author Response

Please see the attachment.

Author Response File: Author Response.pdf

Reviewer 3 Report

Review Report

A critical review of solutions to address ESG disclosure and economic growth issues

This paper is not well written, and, in my opinion, makes no contribution to the science. The paper is chaotic and contains data and information that are not connected to the title of the paper. According to the title, the paper should present “A critical review of solutions to address ESG disclosure and economic growth issues”. The question is what kind of solutions the Authors wanted to review if in the Introduction they emphasized that: “There is no literature regarding the relationship between ESG disclosure and economic growth to the best of our knowledge, though this might be the trigger to a virtuous circle”. Next sentence states that: “This essay aims to emphasis the importance of such a matter to ensure that ESG processes are not just another ‘tick-boxing’ exercise to ensure regulatory compliance but can bring sustainable economic growth”. In my opinion, such statement could not be the aim of scientific paper. Emphasizing the importance of some issues does not contribute to science, it is only a suggestion of directions for further research on a given phenomenon. And such proposals are usually placed at the end of papers, where the author indicates the limitations of her/his analysis and presents possible directions for further research. In fact, this paper indicates some limitations of other authors’ research that should be explore in the future. In my opinion, the paper is not consistent with its title. 

The paper in not well organized and comprehensively described. The introduction is not complete and does not provide sufficient background. Authors did not clearly present the purpose of the study and research hypotheses. They did not explain the research method used. The paper only presents a literature review focusing on corporate disclosure, relationship between ESG and economic growth, post-sustainable transition, etc. In section 3. “SRI strategies and sustainable investment assets under management analysis” the Authors put together the content on the SRI strategies and data on the global and regional sustainable investments. This section is not consistent with the paper’s title. Section 4. “Conclusion” is a repetition of some content from other parts of the paper and is quite chaotic.

Appendix B contains list of two tables, but the Authors do not refer to these tables in the main text of the paper. Appendix B contains list of 11 figures (2-12) presenting data on sustainable investments. However, in the content of the paper the Authors only refer to five of them: Figure 2, Figure 3, Figure 5, Figure 6, and Figure 7. The question is what are the other figures for?

To conclude, I cannot recommend this paper to be published even after major corrections. In my opinion, it makes no scientific contribution to the economics and finance field.  

Author Response

Please see the attachment.

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

The work, after the revision, is clearer and better structured. The authors have teke into account the most important suggestions, therefore I believe that the paper can be published

 

Reviewer 3 Report

Dear Authors, 

thank you very much for all improvements to the paper as well as all explanations. I have no other comments.

Good luck with your future research!