Transformations  in
Business & Economics

THE IMPACT OF ENVIRONMENTAL FACTORS ON THE PERCEPTION OF THE ESG CONCEPT
Jan Kubalek, Michal Kudej, Michal Erben

ABSTRACT: The paper aims to define the E pillar’s significant factors and present their impact on the perception of the ESG concept through an integrated model for all Visegrad Four countries (V4 countries). In this context, the key parameters of Pillar E of the ESG concept were defined, and the impact of each parameter on the perception of the ESG concept was quantified through regression analysis. Empirical research conducted in February 2024 on a sample of 1,320 respondents showed that environmental factors significantly determine the support and application of the ESG concept in enterprises in the V4 countries. Firms that pay attention to environmental factors have a more positive attitude towards ESG than firms that pay less attention to environmental factors. The strongest influence on shaping positive perceptions of ESG is the belief of firms’ management that environmental entrepreneurship brings competitive advantages. Businesses that perceive sustainable business not only as an ethical responsibility but also as a means of gaining a competitive advantage are often more successful in implementing ESG elements into their strategy and business activities. The conviction of company management that the company is managed in accordance with environmental legislation strongly influences their positive attitudes towards ESG. The intense perception of climate change and the application of green tools in corporate management shapes companies’ positive perceptions of the ESG concept. Firms that have demonstrated a responsive approach to addressing climate change by having developed procedures to control GHG emissions, using renewable energy sources, and recycling materials and water clearly show that ESG approaches are firmly embedded in their strategies.

KEYWORDS:  environmental, social and governance (ESG), environmental pillar ESG, environmental factors.

JEL classification:  M14, A13, L26.