This study examines the benefits of combining ESG (environmental, social, and governance) concepts with HRM to boost entrepreneurial success. The authors use the conceptual method to explore how environmental, social, corporate governance, and human resource management issues affect entrepreneurial activity. Thus, the authors conclude that ESG principles in human resource management boost organisational efficiency. These findings are theoretically significant because they prompt a reevaluation of corporate social responsibility and operational efficiency. The research highlights the relationship between personnel refinement and impact, supporting the premise that ESG principles improve entrepreneurial efficiency. The research findings demonstrate how ESG principles in HR management can increase corporate effectiveness, using Russia as an example during the decade of action.
Top1. Introduction
What responsibilities do enterprises have toward the environment in which they operate in the twenty-first century? Historically, merely stating that businesses existed to provide customers with products and services, to generate a profit, and to do so within the confines of the law was sufficient. Since the inception of the industrial revolution in the 19th century until the present day, this comparatively uncomplicated structure has fostered technological advancements and improved the standard of living for billions of individuals worldwide (Oakland & Tanner, 2007; Palacios-Manzano et al., 2021).
This strategy is no longer adequate in the present day. Considering the escalating urgency surrounding climate change, the worldwide dissemination of demands for social justice and human rights enforcement, and the heightened examination of corporate financial structures, investors and consumers are pressuring organizations to be more accountable and transparent regarding their contributions to the global community.
The Environmental, Social, and Corporate Governance (ESG) framework enables organizations to assess their ethical and sustainable practices, thereby promoting market transparency, financial gains for the organization, and industry benchmarking. The concept of Environmental, Social, and Governance (ESG) encompasses all aspects of responsible and sustainable finance (Ragazou, 2021; Ragazou, Passas, & Garefalakis, 2022; Ragazou, Passas, & Sklavos, 2022; Ragazou & Sklavos, 2021). It is a framework for making investment decisions that takes environmental, social, and governance factors into account in addition to financial factors. In addition, it is a procedure for evaluating the performance and scores of companies on each of the three factors E, S, and G to ascertain their investment viability. ESG reporting, conversely, pertains to the revelation of information that elucidates the effects and value-added activities of a corporation in relation to the environment, society, and corporate governance.
ESG investing commenced as a practice during the 1960s. It emerged as a successor to socially responsible investing (SRI), a framework that prohibited investments in tobacco, firearms, or products originating from conflict-affected regions, as well as entire industries or stocks. 2004 saw the introduction of the term ESG by former UN Secretary-General Kofi Annan. The inaugural study, titled “Who Cares Wins,” was collaboratively developed with the largest institutional investors and institutions globally in 2005 (Ragazou, Passas, Garefalakis, et al., 2022).
At present, ESG is expanding and transforming at a rapid rate, as an increasing number of investors seek to integrate ESG considerations into their investment strategies. Already this year, the ESG market is anticipated to double in size. In addition, the “Portfolio Decarbonisation Coalition,” a group of 27 institutional investors and asset managers, predominantly from Europe, that is sponsored by the United Nations and manages $3.2 trillion in assets, has pledged $600 billion to finance green projects and investments (DasGupta, 2022; Erhemjamts et al., 2024; Liu et al., 2023b).
Moreover, it is probable that many of the components and objectives of ESG have already been incorporated into quality frameworks such as Total Quality Management, ISO 9001:2015, and the Baldrige Excellence Framework, as observed by quality practitioners. This Insight Report aims to analyze the ESG concept and its potential to enhance current quality approaches. Furthermore, we will illustrate how ESG is assisting the oil and gas industry in satisfying market demands for more sustainable energy production methods using a case study.
In its entirety, this chapter is organized as follows. A comprehensive literature review on the relationship of environmental, social, and governance (ESG) factors and Total Quality Management is presented in Section 2. The most significant findings and aspects of the literature review are summarized in Section 3. In finality, the chapter is concluded in Section 4, which undertakes an analysis and discussion of the research outcomes.