Environmental, social and governance (ESG) practices and organizational resilience in Brazilian companies

Purpose Over the past two decades, various exogenous shocks pushed companies to enhance their organizational resilience capabilities. This study aims to identify mechanisms used by Brazilian companies to reduce the impact of exogenous shocks and antecedents contributing to the development of organizational resilience. Design/methodology/approach The study particularly examines the influence of ESG performance and disclosures on organizational resilience, which, as a latent construct, was measured using long-term growth and financial volatility and stressed by an ordinary least squares regression with random effects and robust standard errors. Findings Our results demonstrate that ESG performance reduces the financial volatility of Brazilian non-financial listed companies and that ESG disclosures have a significant impact on long-term growth and the reduction of financial volatility during periods when companies are exposed to exogenous shocks, thereby contributing to their resilience. Research limitations/implications Our study was limited to the long term. Future studies investigate the impact of ESG performance and disclosure on the trade-off between short and long-term growth in emerging market countries. Practical implications The practical implications of the study are to observe how managers, investors and regulators can use ESG practices as a mechanism for building organizational resilience and managing crises. Social implications The study demonstrates the impact on building resilience in the communities and regions in which they operate by using ESG practices to build their resilience. Originality/value This study, therefore, corroborates the influence of ESG performance and disclosure in the development of proactive and reactive organizational resilience capabilities.