Corporate Governance, CSR, ESG, and Sustainability: Realigning the Principle-Agent Equilibrium in Multinational Enterprises “MNEs”

ABSTRACT The thesis provides a thorough examination of the interconnections between Environmental, Social, Governance (ESG) principles, Corporate Social Responsibility (CSR), legal frameworks, global value chains, and international agreements that influence the conduct of multinational enterprises (MNEs) in the current business environment. The first step involves the establishment of a fundamental transition towards sustainability and the adoption of responsible business practices. This transition is characterized by the integration of environmental, social, and governance (ESG) considerations and the recognition of the strategic significance of corporate social responsibility (CSR). The thesis subsequently explores the intricate correlation between environmental, social, and governance (ESG) issues and Global Value Chains (GVCs), providing a comprehensive understanding of the escalating significance of ESG concerns in the financial domain and their consequential effects on global investment dynamics. The accompanying discussion explores the domain of international agreements and legal factors that regulate multinational enterprises (MNEs), emphasizing the importance of the OECD Guidelines for Multinational Enterprises in fostering responsible corporate behavior. The ongoing investigation delves into the realms of legislative frameworks, corporate governance, and ESG reporting requirements, highlighting the need of thorough research, industry-specific reporting standards, and voluntary frameworks in bolstering openness and accountability. The present thesis examines the European Commission's ESG Rating Articles in relation to the Sustainable Development Goals (SDGs) established by the United Nations. This analysis uncovers a significant alignment between regulatory efforts and the overarching aims of global sustainability. In summary, this thesis offers a thorough comprehension of the dynamic environment in which multinational enterprises (MNEs) function, emphasizing the imperative of ethical behavior, sustainability, and openness in order to effectively traverse the many intricacies of the contemporary global economy. Keywords: ESG, CSR, MNEs, GVCs, OECD, SDGs