Does ESG reputational risk affect the efficiency and speed of adjustment of corporate investment?

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This study carries significant importance as it delves into the intersection of ESG reputational risk and investment efficiency, unveiling how these factors intertwine in the corporate landscape. By showcasing the link between ESG reputation and suboptimal investment, it sheds light on the broader impact of environmental, social, and governance considerations on corporate decision-making. Understanding how ESG reputational risk influences underinvestment and the sluggish adjustment back to optimal levels is pivotal for investors, policymakers, and corporate leaders. These insights underscore the imperative for integrating ESG considerations into investment strategies, emphasizing the need to mitigate reputational risks to foster more efficient and sustainable corporate practices.

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