Environmental, Social, and Governance Integration into the Business Model: Literature Review and Research Agenda

Environmental, social, and governance (ESG) integration as a socially responsible investment (SRI) from a financial perspective has been discussed extensively. However, few studies discuss its impact on firms' internal operations from the perspective of sustainable development (SD). This study aims to examine the integration of ESG into the currently prevailing business model. Twenty-nine studies were systematically reviewed. Our analysis used an input-process-output model to identify the integration process and the outcomes. The findings show that only two papers explain the implementation steps or transition process of ESG integration, while 27 papers discuss ESG integration as an outcome, including integration behaviors, advantages, practices, and critical views. Our research aims to highlight that firms adopt ESG as a response to pressure from financial markets rather than as a serious effort to integrate sustainability into their core operations. We state the need for more research into the integration process to motivate firms to reform their business models, foster sustainability, and enhance financial performance.