CURRENT STATUS AND CHALLENGES OF CORPORATE INVESTMENT RISK

Abstract

Corporate investment decision-making is undergoing a fundamental transformation as traditional risk models fail to account for today's complex global challenges. This paper examines how Environmental, Social, and Governance (ESG) factors have become critical determinants of investment success in an era of geopolitical volatility, technological disruption, and climate transition. Through detailed case analysis of major investment failures – including WeWork's governance collapse and energy companies facing stranded assets – we demonstrate how ESG risks directly destroy shareholder value. Our research identifies industry-specific risk patterns: energy companies confront transition risks, manufacturers face supply chain vulnerabilities, and technology firms grapple with data governance challenges. The findings reveal that ESG integration provides not just risk mitigation but competitive advantage, enabling companies to navigate regulatory changes, enhance operational resilience, and access sustainable financing. We propose a comprehensive framework for embedding ESG factors throughout investment processes, combining quantitative modeling with qualitative assessment. This approach enables investors to better price previously externalized risks while identifying new opportunities in the green transition. The study concludes that sophisticated ESG integration is no longer optional but essential for long-term value creation, requiring upgraded risk management systems, specialized expertise, and cultural transformation within organizations. As global sustainability regulations intensify and stakeholder expectations evolve, companies that proactively embrace ESG-informed investment strategies will gain durable competitive advantages in increasingly transparent markets.