The evolution of the esg concept and its role in the corporate governance of joint-stock companies

Raxmatov Ziyodullo

doi:https://journal.nordicuniversity.org/

Abstract

This article examines the evolution of the Environmental, Social and Governance (ESG) concept, its development from corporate social responsibility into a modern management instrument, and its role in the corporate governance of joint-stock companies. The environmental, social and governance dimensions of ESG are distinguished in terms of their substantive content. Drawing on stakeholder, agency, institutional and signaling theories, the article explains the mechanisms through which ESG may influence managerial decision-making, risk management, information transparency and long-term corporate value. Particular attention is paid to the principal challenges of ESG implementation in developing and transition economies, including weak institutional enforcement, concentrated ownership, fragmented reporting standards and divergence among ESG ratings. The article concludes by developing conceptual implications for integrating ESG into the corporate governance systems of joint-stock companies in Uzbekistan, with particular emphasis on transport enterprises.

Keywords

ESG

corporate governance

joint-stock company

sustainable development

ESG reporting

stakeholder theory

institutional environment

corporate performance

The formation and development of joint-stock companies in the global economy gave rise to various models of corporate governance. Initially, these models were primarily designed to improve firms’ financial performance, protect shareholders’ interests and monitor managerial activities. Over time, however, geopolitical tensions, the unsustainable use of natural resources, environmental challenges, pandemics and socio-economic crises became increasingly prominent. At the same time, companies faced internal problems such as inefficient resource use, violations of labour rights and corporate corruption. These developments demonstrated that financial indicators alone were insufficient for evaluating corporate activity. Against this background, the ESG concept emerged as a framework for systematically assessing companies’ environmental impacts, relationships with stakeholders and quality of governance (Gillan et al., 2021).

References

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Rights & License

Creative Commons Attribution 4.0 International (CC BY 4.0)

This article is published under the Creative Commons Attribution 4.0 International License (CC BY 4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.