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Reference
Yan, S., Zhang, F., & Li, Z. (2026). ESG investing and pollution outsourcing. Strategic Management Journal, 1–36. https://doi.org/10.1002/smj.70115
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🎙️🔎 Welcome to Revise and Resubmit!
Today, I want to take you into a rather intriguing corner of the world of corporate sustainability, where appearances can be deceiving and the most important clue may be hiding somewhere just beyond the obvious. 🌍🕵️♂️
Our paper today is titled “ESG Investing and Pollution Outsourcing”, by Shipeng Yan, Fan Zhang, and Zhengyu Li, published online on 3 August 2026 in the Strategic Management Journal, a highly prestigious academic journal and proudly part of the FT50 journal list. 📚🏆 The paper is published by John Wiley & Sons Ltd.
Now, ESG investing has often been presented as a powerful new force for corporate accountability. The logic seems straightforward. Investors care about environmental performance, so companies should have every reason to become cleaner, greener, and more responsible. 🌱💰
But as I began exploring this study, I found myself drawn to a rather more curious possibility.
What if the pollution does not disappear?
What if it simply moves?
Using global firm data covering 2006 to 2019, Yan, Zhang, and Li investigate whether companies facing pressure from ESG investors might reduce pollution within their own operations while quietly shifting some of that environmental burden onto suppliers. The result is a fascinating and uncomfortable puzzle: a company may appear cleaner on paper, while the pollution associated with producing its goods remains much the same. 🔍🏭
The authors describe this as a sophisticated form of corporate decoupling. And the story becomes even more interesting when we look at the conditions under which this behaviour weakens. ESG investors can sometimes make a genuine difference when they provide access to green technologies or when they have greater visibility into the environmental practices of suppliers.
In other words, perhaps the real test of ESG is not simply asking, “Is this company cleaner?” 🌿
Perhaps we should ask, “Where did the dirt go?”
That question takes us beyond corporate reports and sustainability promises, into the complicated world of supply chains, incentives, institutional pressure, and the curious ways organisations respond when someone is watching. 🧩📊
❓ So, if a company becomes greener only because the pollution has been moved somewhere we cannot easily see, are ESG investors really changing corporate behaviour, or merely changing the appearance of it?
🙏 My sincere thanks to Shipeng Yan, Fan Zhang, and Zhengyu Li, and to John Wiley & Sons Ltd. for bringing this important research to the academic community.
🎧 If you enjoy Revise and Resubmit, please subscribe to Revise and Resubmit on Spotify and to Weekend Researcher on YouTube. 📺 You can also find the podcast on Amazon Prime and Apple Podcasts.
🌍 Until next time, keep questioning the evidence, follow the trail, and remember: sometimes the most revealing clue is the one that seems to have disappeared.