To What Extent Has ESG Regulation Influenced Corporate Investment in Sustainable Projects?

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Provides a structured comparative framework and empirical evidence linking ESG regulation to investment outcomes, useful for future research on disclosure effectiveness.

🏢実務担当者:Demonstrates how mandatory ESG reporting can influence capital allocation and green bond issuance, helping corporate sustainability teams justify investment in disclosure infrastructure.

🏛政策担当者:Offers evidence-based insights on how regulatory design (stringency, enforcement) shapes sustainable investment, directly applicable to rulemaking for ISSB, CSRD, or SSBJ.

The growth of Environmental, Social, and Governance (ESG) regulatory frameworks in the major economies around the world in the last ten years has had an effective restructuring effect on the corporate investment decision making. The paper will explore the degree in which the ESG regulation can affect corporate investment in sustainable projects based on evidence in the empirical studies, regulation reports and market trends. The analysis will examine three major regulatory regimes-The European Union Sustainable Finance Disclosure Regulation (SFDR) and Corporate Sustainability Reporting Directive (CSRD), the United States proposal to have mandatory disclosure (Securities and Exchange Commission), and use of green bonds in managing corporate risks in China-and how they have affected the allocation of capital, investment efficiency, and the issuance of green bonds, and corporate risk management. The results indicate that mandatory reporting of ESG disclosures have helped to provide a quantifiable change in the capital flows towards sustainable investments, where the issuance of sustainable bonds with a global scope has reached about USD 1.1 trillion in 2024. Nevertheless, the degree of such an effect depends on the institutional settings and depends on factors like regulatory rigidity, the level of ESG maturity and the occurrence of greenwashing risks. Based on the Resource-Based View, Stakeholder Theory, and the mediation theory of Kharuddin et al. (2025) the paper states that ESG regulation does not only play the role of a compliance issue but as a construction mechanism that will promote the efficiency of investments and the creation of corporate value in the long term.

• semanticscholar https://doi.org/10.46609/ijsser.2026.v11i05.014first seen 2026-06-26 05:37:29