Final work : A systematic literature review of ESG practices and access to finance. A review from 2015 to 2025

Abstract

This study provides a systematic literature review (SLR) of the relationship between environmental, social, and governance (ESG) practices and firms’ access to finance. Using a PRISMA-based approach, it synthesises evidence from 60 peer-reviewed empirical studies published between 2015 and 2025. The findings indicate that ESG performance is generally associated with improved financing conditions across multiple dimensions, including lower debt costs, enhanced access to bank loans, reduced financing constraints, and lower equity costs. These effects are primarily related to lower perceived risk, reduced information asymmetry, and greater credibility of ESG disclosure. However, the evidence remains heterogeneous across ESG dimensions, firm characteristics, measurement approaches, and institutional contexts. Importantly, the review shows that financial outcomes are strongly influenced by ESG scores, ratings, and disclosure-based measures, suggesting that financial market participants respond primarily to observable ESG signals and disclosure credibility rather than directly verified sustainability performance alone. This highlights the central role of ESG signalling, disclosure credibility, and information asymmetry in shaping firms’ financing conditions. By integrating fragmented evidence across both debt and equity markets, this study contributes to the literature by demonstrating that ESG-related financing outcomes are driven not only by substantive ESG practices but also by disclosure-based ESG signalling and credibility mechanisms. The findings offer important implications for firms, investors, and policymakers, emphasising the need for greater transparency, consistency, and reliability in ESG measurement and reporting.