ESG in Platform Markets

Abstract

Platforms have radically transformed many markets. Initially perceived as the harbinger of a new economy, platforms today can no longer ignore their impact on the triple bottom line of profit, planet, and people, as their adverse effects on the environment (e.g., massive energy consumption and carbon emissions) and society (e.g., misinformation, hate speech, discrimination, degradation of mental health, and privacy violations) become increasingly evident. As a result, consumers, regulators, and even business leaders demand greater transparency along the environmental (E), social (S), and governance (G) pillars of a platform’s activities. This chapter first introduces a simple economic framework to organize the literature on ESG in platform markets. It then discusses key papers and points out avenues for future research.

Keywords: ESG pillars, Triple bottom line, Sustainability, Regulation