Why Do ESG Disagree? A Survey of Measurement, Methodology, and Financial Outcomes

The study provides a systematic literature review of empirical research examining the relationship between Environmental, Social, and Governance (ESG) ratings, firm valuation, and firm risk. Despite the rapid expansion of ESG-related research, empirical findings remain fragmented, with studies reporting positive, negative, insignificant, and context-dependent effects. This study documents recurring patterns suggesting that the observed divergence in ESG findings appears to be jointly associated with methodological heterogeneity, ESG measurement choice, and underlying economic and institutional differences, rather than reflecting any single dominant cause. Adopting a structured, systematic review design, the study organizes 103 peer-reviewed articles published between 2016 and 2025 based on ESG measurement choices, econometric frameworks, and institutional and market heterogeneity. The review integrates methodological coding with bibliometric mapping to assess how empirical evidence has been generated and clustered within the literature. The findings show that dominant linear and static empirical frameworks tend to obscure nonlinear, asymmetric, and regime-dependent ESG effects, while advanced, measurement-aware methodological approaches reveal more economically meaningful valuation and risk dynamics. ESG appears to influence financial outcomes primarily through indirect channels, including discount rates, risk premia, information asymmetry, and governance quality. The comparative classifications presented in this review are interpretive in nature and do not constitute formal meta-analytic estimates. The survey concludes by identifying key methodological and measurement challenges and outlining directions for future research to improve causal inference and policy relevance in ESG finance.