Abstract
The integration of Environmental, Social, and Governance (ESG) metrics into performance evaluation has become increasingly vital in achieving corporate sustainability and competitive advantage. This study investigates the impact of ESG metrics on organizational performance within the framework of strategic management accounting (SMA). Using a quantitative approach, secondary data were collected from ESG reports of 100 publicly listed companies across various industries. The analysis employs multiple linear regression to examine the relationships between ESG dimensions—Environmental, Social, and Governance—and financial performance indicators, including Return on Assets (ROA), Return on Equity (ROE), and Tobin’s Q. The results reveal a significant positive correlation between ESG scores and financial performance, with the Environmental dimension exhibiting the strongest influence (β = 0.45, p < 0.01), followed by Social (β = 0.30, p < 0.05) and Governance (β = 0.25, p < 0.05). Firms with high ESG scores (≥75) reported 15% higher ROA and 20% higher ROE than those with lower scores. These findings underscore the importance of integrating ESG into SMA practices to enhance transparency, stakeholder trust, and sustainable decision-making processes. This study contributes to the literature by providing a comprehensive evaluation framework that aligns ESG metrics with corporate objectives. Practical recommendations include adopting global ESG standards, improving transparency in ESG reporting, and prioritizing strategic initiatives in sustainability. Future research could explore the long-term effects of ESG integration on non-financial outcomes, such as brand reputation and employee satisfaction.
Published Version
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