What do we know about ESG and risk? A systematic and bibliometric review

Environmental, Social and Governance (ESG) issues have become particularly relevant in the agendas of policymakers, investment decisions by companies and asset allocation process of investors. However, the transition to a greener and more sustainable economic system is not without risks. The literature has investigated the relationship between ESG and risk in different ways, through multiple perspectives and approaches. We select all documents with "ESG" and "Risk" in the title, abstracts and keywords available in Scopus and, after removing non-relevant papers, we are left with a sample of 589 documents published in the period 1983-2022. To provide a view of the most important studies, we also focus on the most cited documents to discuss the methodological approaches and main results. The results show that over time, ESG has gained increasing attention from the literature, but researchers work in isolation and there is no single approach or leading core topic driving academic productivity; a clear taxonomy of ESG risks appears to be missing. To the best of our knowledge, this paper is the first to discuss research on ESG and risk from a financial perspective. The results highlight some existing gaps in the literature that can provide a hint for the development of the topic by researchers. These include a clearer taxonomy of ESG risks that can affect investors' and companies' decisions, a greater effort to evaluate how ESG risks distribute and spill from one sector to another and the inclusion of emerging economies and small and medium-sized enterprises in the samples.