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
Since its inception by the United Nations in 2004, ESG integration has amassed considerable traction and recognition as a modern and pervasive indicator of sustainability on a global scale. The viewpoints of organizations regarding sustainability have been influenced by various factors, including government regulations, the demands of investors and stakeholders for information regarding the environmental, social, and governance (ESG) performance of the organization. As a result, concerns regarding companies attempting to manipulate their environmental, social, and governance (ESG) performance increase, alongside the emergence of practices such as “greenwashing,” “value washing,” and “blue washing,” which are implemented to entice investors and placate stakeholders. Value cleansing is an act of intentionally distorting the outcomes of value (Ling et al., 2023; Salvi et al., 2024). Greenwashing is an improper use of sustainability reports for manipulative purposes. Blue washing refers to unethical strategies that acquire credibility through the use of the United Nations Compact (Souguir et al., 2024).
In the literature, ESG integration is examined from two distinct vantage points. SRI, or socially responsible investing, is the central theme, encompassing the examination of environmental, social, and governance (ESG) issues that are associated with investments. From the standpoint of sustainable development (SD), the subsequent analysis examines ESG variables that are pertinent to the operations of corporations. Nevertheless, despite the considerable scholarly attention devoted to scrutinizing the integration of environmental, social, and governance (ESG) factors into socially responsible investing (SRI), insufficient emphasis has been placed on the integration of ESG considerations into the fundamental operations of corporations. Notwithstanding the growing prevalence of ESG compliance among corporations, the precise ramifications of ESG on business models remain poorly understood (Henisz & McGlinch, 2019). Acquiring this knowledge is crucial in order to address the sustainability concerns of both organizations and society in an efficient manner. Incorporating ESG considerations into the current business paradigm necessitates the incorporation of ESG issues into the value proposition, value generation, value distribution, and value acquisition elements.
By conducting an exhaustive review of the relevant literature, this study seeks to discover the relationship between ESG factors and the prevalent business model. There are two main domains into which the literature on ESG integration can be categorized: process and result. Regarding ESG issues, the term “process” in this context refers to any modification, transition, or revision that occurs within the business model operations of a company (Benuzzi et al., 2024; Henisz & McGlinch, 2019; Ragazou, 2021; Ragazou et al., 2023; Schiemann & Tietmeyer, 2022). As directed, our research investigates the relationship between ESG factors and the business model from two significant perspectives in the existing literature. This chapter investigates the influence of ESG factors on business model outcomes and the integration process.
Further investigation is required to gain a comprehensive understanding of the operation of the integration process across various scenarios and to offer direction on how to integrate it into the current business architecture. Additionally, integration obstacles, including the absence of standards for ESG practices, must be resolved. The primary practical implication is that the current promotion of ESG may lack foundation if there is no global emphasis on integrating ESG principles into corporate strategies (Erhemjamts et al., 2024). Moreover, this chapter proposes that future research should concentrate on the development of business model archetypes that incorporate environmental, social, and governance (ESG) considerations in order to improve financial performance, mitigate environmental harm, and address these concerns. In addition, the incorporation of case studies and other qualitative research would aid organizations in efficiently addressing challenges and reaching consensuses regarding the integration of ESG components into their operational frameworks.