Arizona State University (ASU) MGT 302 Principles of International Business Exam 1 Practice

ESG factors shape how international firms allocate capital, meet regulatory requirements, choose suppliers, and manage brand perception. Investors increasingly assess environmental, social, and governance performance to gauge long-term risk and return, which can affect access to capital and cost of funds. Across borders, regulatory compliance requires aligning with varying environmental rules, labor standards, and anti-corruption laws, plus disclosure obligations that can influence where a company operates and how it sources goods. In supplier networks, buyers evaluate ESG practices of potential vendors—environmental impact, labor conditions, and governance structures—affecting supplier selection, contracts, and ongoing oversight. Finally, consumer perception matters: stronger ESG performance can boost brand loyalty and market demand, while reputational risk from ESG problems can ripple through revenue and partnerships. Taken together, ESG considerations are woven into decisions and the resilience of supply chains, not just marketing or internal audits.