An Analysis of the Influence of Environmental, Social, and Governance (ESG) Factors on Multinational Investment Decision-Making

As global sustainable development concepts continue to gain traction, the role of Environmental, Social, and Governance (ESG) factors in investment decisions has become increasingly prominent, particularly in cross-border investment.Companies, when making cross-border investment decisions, now consider not only traditional financial returns but also the ESG environment of the host country and their own ESG performance.This study explores the mechanisms through which ESG factors influence cross-border investment decisions by reviewing literature, constructing a theoretical model, conducting empirical analysis, and carrying out case studies.The study examines how ESG factors impact investment decisions through channels such as corporate reputation, risk management, resource acquisition, and strategic positioning.Through the analysis of global corporate ESG scores, cross-border investment data, and macroeconomic environments, this paper reveals that good ESG performance can enhance a company's attractiveness for crossborder investment, reduce investment risks, and improve investment returns.Additionally, the study highlights that the ESG environment in different regions and industries significantly affects cross-border investment decisions.The findings provide a theoretical foundation for companies to effectively integrate ESG factors into their cross-border investment strategies and offer practical guidance for governments and regulators to optimize policies.