Duwi Agustina

Faculty of Economics and Business, Universitas Bangka Belitung, Bangka

DOI: https://doi.org/10.19184/bisma.v19i3.53693

ABSTRACT 

This study aims to conduct a comprehensive systematic literature review to analyze the relationship between Environmental, Social and Governance (ESG) practices

and corporate performance and identify research gaps. The research method uses the Systematic Literature Review approach with the PRISMA 2020 protocol, analyzing 40 high-quality journal articles from the Scopus database for the 2021-2025 period. Data extraction was carried out using a structured matrix including sample characteristics, methodology, ESG dimensions, performance indicators, and key findings, analyzed through narrative synthesis with categorization based on

theoretical frameworks. The findings show a dominance of a positive correlation (60% of studies) between ESG practices and corporate performance, with 30% of studies showing mixed results indicating the complexity of the relationship. Causal mechanisms are identified through resource-based mechanisms (efficiency and

innovation), stakeholder-based mechanisms (reputation and trust), risk-based mechanisms (risk mitigation), and market-based mechanisms (investor preferences). Moderation factors include firm size, industry characteristics, regulatory framework and economic development level. Research gaps include inconsistencies in ESG measurement, endogeneity issues, sample bias, and temporal limitations of studies. This research develops an integrated theoretical framework and research agenda that provides guidance for future research in sustainable business practices as well as practical insights for corporate decision-making and policy formulation.

Keywords: Environmental Social Governance, Corporate Performance, Stakeholder Based Mechanisms, Risk-based Mechanisms, Market-based Mechanisms