Corporate Governance and ESG in Investment Decisions: An AI-Enhanced Perspective

Abstract

The environmental, social, and governance (ESG) scores are considered as the metrics that determine the sustainability and the ethical impact of an investment. Thus, corporate sustainability involves assessing organisations based on the outcomes within these three stakes. The ESG factors together help the investors determine what is considered as a responsible and sustainable investment. The current paper aims at analysing the connection between Corporate Governance and ESG factors within the investment decision-making process and the impact of AI in the system. Thus, while the keywords are ESG and the relationship between investments and Corporate Social Responsibility (CSR), AI is presented as a developing application that enriches these processes. This paper further delves into how ESG has affected corporate law and governance standards and demystified the role of boards, focusing on the extent of technological development and vigil mechanisms. Finally, this study emphasizes the significance of the proper approach to integrate corporate governance with ethical and sustainable business models as the key to drive long-term growth in capital markets.