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Challenges in Establishing ESG Frameworks in Special Situations Companies: A Critical Analysis
Subject area: Physical Sciences and Environment · Area of research: Environment, Social and Governance
DOI: https://doi.org/10.64388/IREV9I4-1711610-5458
Abstract
Environmental, Social, and Governance (ESG) frameworks have become essential tools for corporate accountability and sustainable value creation. However, special situations companies ? firms undergoing atypical events such as restructurings, distress, spinoffs, or other one-time strategic upheavals ? face unique hurdles in adopting and implementing ESG frameworks. This paper provides an academic analysis of the challenges inherent in establishing ESG frameworks within special situations companies. It begins by defining ESG frameworks and special situations, then examines why integrating ESG is increasingly imperative even for companies in crisis. The core of the paper critically analyzes key challenges: the lack of unified ESG standards and the resulting complexity of compliance; data collection and reporting difficulties; resource and expertise constraints; the tension between short-term turnaround pressures and long-term ESG goals; stakeholder alignment and governance issues; and risks of superficial adoption (?greenwashing?). Each challenge is supported by current research and industry observations. The analysis also discusses emerging efforts to address these obstacles ? from global standardization initiatives to best practices in ESG integration ? providing insight into how special situations firms might navigate this complex landscape.
Keywords
ESG Frameworks, Special Situations, Corporate Restructuring, Sustainability Reporting, ESG Challenges, Greenwashing, Turnaround Strategy.
References
[1] Adardour, Zahra, et al. “Exploring the drivers of environmental, social, and governance (ESG) disclosure in an emerging market context using a mixed methods approach.” Future Business Journal 11 (2025): Article 107. [SpringerOpen Access].
[2] Alvarez & Marsal. “A&M Perspective: Implications of ESG on Corporate Financing and Restructuring.” Alvarez & Marsal Insights, December 19, 2022.
[3] Alvarez & Marsal. “Poor ESG performance increases likelihood of targeting by activist investors.” Alvarez & Marsal Press Release, December 2, 2019.
[4] EcoActive. “The 5 Main Challenges of ESG Reporting and Best Practices.” EcoActive ESG Blog, February 25, 2025.
[5] Ernst & Young (EY). “What is market short- termism’s perceived impact on ESG investments?” EY Better Finance Podcast Transcript, 2023.
[6] Investopedia. Will Kenton. “What Is a Special Situation in Investing With Example.” Investopedia, updated August 17, 2020.
[7] Investment Week. “The role of ESG in special situations stocks.” Investment Week (Analysis), 18 July 2023.
[8] Thomson Reuters Institute. “Special report: ESG under strain – Greenwashing: A growing risk for companies.” Thomson Reuters, 2022.
[9] A&M Perspective: Implications of ESG on Corporate Financing and Restructuring | Alvarez & Marsal | Management Consulting | Professional Services
[10] What Is a Special Situation in Investing With Example
[11] The role of ESG in special situations stocks Poor ESG performance increases likelihood of targeting by activist investors | Alvarez & Marsal | Management Consulting | Professional Services
[12] The 5 Main Challenges of ESG Reporting and Best Practices - EcoActive ESG
[13] What is market short-termism’s perceived impact on ESG investments? | EY – US Exploring the drivers of environmental, social, and governance (ESG) disclosure in an emerging market context using a mixed methods approach | Future Business Journal | Full Text ESG Reports: Barriers for Middle Market
[14] 5 Big Challenges of ESG Data Management – Veridion Special report: ESG under strain | Thomson Reuters
How to cite this paper
@article{1711610,
author = {Amit Pandey},
title = {Challenges in Establishing ESG Frameworks in Special Situations Companies: A Critical Analysis},
journal = {Iconic Research And Engineering Journals},
year = {2025},
volume = {9},
number = {4},
pages = {1600-1612},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1711610.pdf},
abstract = {Environmental, Social, and Governance (ESG) frameworks have become essential tools for corporate accountability and sustainable value creation. However, special situations companies ? firms undergoing atypical events such as restructurings, distress, spinoffs, or other one-time strategic upheavals ? face unique hurdles in adopting and implementing ESG frameworks. This paper provides an academic analysis of the challenges inherent in establishing ESG frameworks within special situations companies. It begins by defining ESG frameworks and special situations, then examines why integrating ESG is increasingly imperative even for companies in crisis. The core of the paper critically analyzes key challenges: the lack of unified ESG standards and the resulting complexity of compliance; data collection and reporting difficulties; resource and expertise constraints; the tension between short-term turnaround pressures and long-term ESG goals; stakeholder alignment and governance issues; and risks of superficial adoption (?greenwashing?). Each challenge is supported by current research and industry observations. The analysis also discusses emerging efforts to address these obstacles ? from global standardization initiatives to best practices in ESG integration ? providing insight into how special situations firms might navigate this complex landscape.},
keywords = {ESG Frameworks, Special Situations, Corporate Restructuring, Sustainability Reporting, ESG Challenges, Greenwashing, Turnaround Strategy.},
month = {October},
doi = {https://doi.org/10.64388/IREV9I4-1711610-5458}
}