Going Green and Firm Value: Mapping the Relationship Through a Literature Review

Abstract

Objective: The purpose of this paper is to do a literature review of articles that study the effect of environmental initiatives and firm value.   Theoretical Framework: In recent years, there has been a growing global interest in sustainability and environmental care. Companies have developed initiatives such as Corporate Social Responsibility (CSR) strategies, and Environmental Performance (EP) indicators to demonstrate their commitment to sustainability   Method: The analysis includes publications on Environmental, Social, and Governance (ESG), CSR, EP, and environmental disclosure published between 2017 and early 2023.   Results and Discussion: The findings show a positive relationship between firm value and CSR, EP, ESG, and environmental disclosure. Companies that adopt environmental initiatives tend to have greater protection against market uncertainty and generate greater stakeholder confidence. This positive relationship is more significant in developed countries than in developing countries.   Research Implications: An opportunity for further research on this topic is identified due to the relatively low number of studies that explore the relationship between environmental behaviour and firm value in Latin America and the Caribbean.