Understanding ESG prioritization in companies from tropical emerging markets and Australia

Abstract

This study investigates the dynamic interplay between Environmental, Social, and Governance (ESG) practices and the life cycles of tropical emerging markets, explicitly focusing on companies from China, India, Brazil, Mexico, South Africa, and Australia. Utilizing a quantitative approach with panel data, we examine whether ESG maturity influences the cash flow dynamics of these companies. The hypotheses were confirmed: H1 reveals that companies in immature cycle phases prioritize decisions centered around the "G" dimension of ESG. H2 suggests that companies in mature life cycle phases emphasize decisions related to the "E" and "S" dimensions of ESG. H3 indicates that companies in mature life cycle phases prioritize the "S" dimension over the "E" dimension within their ESG strategies. The results unveil distinct prioritization patterns of ESG dimensions across different lifecycle stages, shedding light on the evolving strategy of companies and providing valuable insights for academia and business.