New Ideas Concerning Arts and Social Studies Vol. 8

Environmental, social and governance (ESG) performance has become a routine input to equity analysis, portfolio construction and corporate reporting, yet the empirical literature linking ESG performance to the valuation of listed companies remains unsettled in ways that are frequently obscured by summary statements of a positive relationship. This critical review examines how ESG performance has been theorised, measured and estimated as a determinant of corporate value, and evaluates the strength of the resulting evidence. Peer-reviewed research published between 2004 and 10 June 2026 was identified through scholarly metadata indexes and citation searching, supplemented by foundational earlier work on corporate social performance. Four findings emerge from the synthesis. Theoretical accounts that predict higher valuations for high-ESG firms and accounts that predict lower expected returns for the same firms are frequently conflated in empirical designs, so that supportive results are reported for logically incompatible mechanisms. Rating divergence is substantial and arises predominantly from measurement rather than from differences in conceptual scope, which means that the independent variable in most valuation regressions is provider-specific and only partially comparable across studies. Reported valuation effects are conditional rather than general, depending on financial materiality, disclosure credibility, investor attention and institutional context, and they weaken or reverse under stricter identification, alternative data vendors and replication. Aggregate summaries drawn from meta-analytic work overstate the practical significance of the relationship because they pool heterogeneous constructs and outcome variables. The evidence supports a defensible but narrow conclusion: material, verified and credibly assured ESG performance is associated with valuation differences in settings where investors can observe it, whereas composite ESG scores have limited demonstrated valuation content once measurement error, endogeneity and firm characteristics are addressed. Priorities for future research include provider-triangulated replication, designs that separate expected-return effects from cash-flow effects, and evaluation of whether harmonised reporting regimes reduce rather than reproduce measurement divergence.