The ESG Chessboard : A Qualitative Investigation Into Managerial Perceptions and Decision-making

Sustainability has been a part of business for a long time, adapting throughout the years. Overthe past decade, the abbreviation ESG, which stands for environmental, social and governance,has gained traction. This point of view on sustainability created the opportunity for utilizationof a new metric, ESG rating. With a rapid evolution of ESG, there are bound to be parts leftuncovered in academic research. Managerial perspectives on ESG ratings as well as managerialdecision-making process regarding ESG matters both appeared largely unexplored. Throughsemi-structured interviews of companies in Sweden, this study sought to explore managerialperceptions regarding ESG ratings and to uncover how internal and external pressures affectmanager’s decision-making process.The paper is one of the few studies which has tried to pursue such an objective which led to theauthors formulating a conceptual model without relying on existing models in order to attemptto explain the phenomena at play. The study was conducted as an inductive qualitative studywhich collected relevant data through the use of semi-structured interviews with managersfrom different levels and industries. The data was in turn analysed through a thematic analysisand connected to the theories making up the conceptual model.The findings of the study revealed a clear lack of awareness amongst the managers related toESG ratings as a consequence of the metric not being utilized in the firm at their respectivedecision-making level. There were thus no internal or external pressures which could beidentified as having affected their managerial perception of the metric since they had a verylimited prior knowledge of it. The unexpectedly vast amount of data related to the managerialperception of the ESG did, however, reveal that external pressure did affect them in relation totheir view of that concept. It was also found that external and internal pressure did affect themanagers decision-making process during ESG-related decisions, across both industries as wellas decision-making levels. These findings enabled theoretical, practical and societalimplication to be drawn which are thoroughly explored in the later parts of the thesis.