Deconstructing the ESG Stalemate and Incorporating the Behavioral Consumer

Abstract

ESG (environmental, social, governance) presents a unique and difficult problem. It is omnipresent in the real world, yet controversial and deadlocked. In the academic world, ESG and sustainability-related research lacks intra- and interdisciplinary thinking, with few holistic approaches and correspondingly low impact. This article attempts to bridge these gaps by examining diverse perspectives from academia and practice to deconstruct today’s ESG stalemate, through stakeholder analysis and a multidisciplinary lens. It introduces a novel framework including four considerations for defining ESG (multi-disciplinarity, double materiality, fiduciary duty, and innovation & growth) and identifies three core challenges in measuring ESG (data disclosure, single rating, and reality gap). This framework reveals the missing perspective of a key stakeholder, the consumer, and proposes that incorporating behavioral approaches and a consumer focus can augment extant ESG efforts which have primarily emphasised rational approaches and investor focus. To further support this view, four randomized controlled trials were conducted across a total sample of 3,900 U.S.

consumers revealing the link between firm ESG characteristics and change in consumer purchase decisions for products. The studies provide evidence that even consumers with the most conservative political orientation can change their purchase decisions based on firm ESG characteristics, confirming the relevance of the behavioral consumer. Drawing on consumer psychology research and practical insights into investor behavior, it proposes new perspectives and implications to advance ESG-related thought and action for researchers, managers, and policymakers.

Keywords: ESG, CSR, sustainability, consumer behavior, multidisciplinary, political orientation, consumer polarization, political consumerism

Date of Award	2025
Original language	English
Awarding Institution	The Hong Kong University of Science and Technology
Supervisor	Abhiroop MUKHERJEE (Supervisor) & Anirban Mukhopadhyay (Supervisor)