ABSTRACT This study provides a comprehensive review of the current empirical research on sustainable portfolio selection, with a particular focus on the practical implications of integrating environmental, social, and governance (ESG) criteria into investment decision‐making. Combining a structured literature review (SLR) with a bibliometric analysis using Bibliometrix and VOSviewer, this paper identifies methodological approaches, critical developments, and persistent challenges in the field. A total of 44 high‐quality contributions—defined as those published in A or A* journals according to the 2022 ABDC Journal Quality List or with more than four citations per year (CPY)—were selected from Scopus and Web of Science through a rigorous six‐step screening process. The analysis revealed five main research themes and associated findings: (1) sustainable portfolio selection methods are divided into two dominant methodological paradigms: extensions of modern portfolio theory (MPT) through sustainability metrics and multi‐criteria decision‐making approaches that balance financial returns with sustainability goals; (2) ESG scores are heterogeneous across rating agencies; (3) alternative metrics emerge to measure sustainable performance; (4) screening strategies often lead to inefficient portfolio solutions; and (5) sustainable portfolios do not systematically outperform traditional portfolios. However, the review also reveals unresolved issues such as ESG data inconsistency, methodological complexity, and greenwashing risks, which continue to limit the effective implementation of sustainable investing strategies. The paper emphasizes the urgent need for robust, standardized tools that integrate both quantitative and qualitative sustainability indicators, and it calls for stronger collaborations between academia and the financial industry to enhance the real‐world applicability of sustainable portfolio models.

ABSTRACT We examine how religiosity shapes firms' environmental, social, and governance (ESG) performance using a global panel of 72,240 firm‐year observations across 41 countries from 2000 to 2022. We measure religiosity using World Values Survey indicators and find that it is negatively associated with ESG performance. This relationship shifts in Muslim‐majority countries, where firms demonstrate significantly higher ESG engagement, particularly in the environmental and social pillars, whereas governance practices show no comparable improvement. The moderating effect is strongest among larger firms and those with established corporate social responsibility (CSR) structures. One plausible explanation is that institutionalized expressions of Islamic obligations, such as stewardship, public welfare, and community responsibility, translate into more visible and measurable environmental and social initiatives. In contrast, conventional governance indicators may fail to capture Shariah‐based oversight mechanisms or may be constrained by country‐specific regulatory structures. Our results remain robust across multiple alternative specifications and statistical tests. Overall, we provide systematic evidence that religious institutional contexts shape corporate sustainability behavior in a meaningful and quantifiable manner.

ABSTRACT Supply chain low‐carbon transformation (SCLCT) is regarded as an important strategy for corporate sustainability, but whether SCLCT can enhance corporate sustainability performance (CSP) remains unclear. To fill this research gap, this study investigates the effect of SCLCT on CSP. Grounded in stakeholder theory and organizational legitimacy theory, this study employs fixed effects models to analyze 2011–2023 panel data on Chinese A‐share listed manufacturing firms. The results demonstrate that SCLCT has a positive effect on CSP. Specifically, SCLCT improves CSP through three potential mechanisms: by reducing external transaction costs, fostering green innovation, and increasing employment opportunities. Furthermore, both supply chain concentration and media attention positively moderate the relationship between SCLCT and CSP. This study aims to provide theoretical insights and practical guidance for managers and policymakers seeking to enhance CSP through SCLCT strategies.

ABSTRACT This research examines the impact of green servitization, Industry 4.0 adoption, absorptive capacity and eco‐innovation capability on green firm performance in the Chinese manufacturing sector, a crucial yet underexplored context due to its significant environmental influence because of rapid industrialization. The data was collected from 450 mid to senior‐level managers in Chinese manufacturing firms, and it was analyzed using partial least squares structural equation modeling (PLS‐SEM). The outcomes show that both green servitization and digital transformation positively impacted eco‐innovation and absorptive capabilities, significantly improving green firm performance. Eco‐innovation capability emerged as a stronger mediator than absorptive capacity, and the interconnection between green servitization and Industry 4.0 shows a novel integration of digital and green strategies that extend dynamic capabilities theory. However, the moderating role of industry type was insignificant; high‐tech firms showed greater capability development. The research contributed by examining a moderated mediation model that connects green servitization, digital transformation, and sustainability outcomes in an emerging economy, offering actionable insights for firms and policy makers for achieving competitive and sustainable performance through integrated environmental and technological strategies.

ABSTRACT This study develops an integrated framework explaining how ESG reporting, when aligned with the Sustainable Development Goals (SDGs), influences firm performance over time. Moving beyond static or symbolic interpretations, it conceptualizes ESG–SDG alignment as a strategic, institutional, and capability‐building process through which firms embed sustainability principles into strategy, governance, and operations. By combining BERTopic and long short‐term memory (LSTM) models, this analysis captures both the semantic content and temporal dynamics of ESG disclosures, addressing persistent limitations in traditional ESG ratings that neglect narrative quality and lagged financial effects. Empirical evidence from 205 publicly listed Taiwanese ICT firms shows that ESG topics aligned with SDG 6 (Clean Water and Sanitation), SDG 13 (Climate Action), and SDG 9 (Industry, Innovation, and Infrastructure), specifically water resource management, carbon emissions reduction, and digital transformation, exhibit significant positive associations with firm earnings. Firms that disclose deeper, sector‐relevant, and credible sustainability commitments demonstrate stronger and more consistent financial performance, underscoring that narrative depth and thematic relevance matter more than disclosure volume. Theoretically, the study unites stakeholder, institutional, sustainability accounting, impact measurement, and dynamic capabilities perspectives to explain how ESG reporting converts external legitimacy pressures into internal adaptive capacity and long‐term value creation. Practically, it highlights the importance of linking ESG disclosures to measurable SDG targets and using real‐time sustainability indicators to enhance transparency. Overall, the research advances a temporally sensitive and impact‐oriented understanding of ESG reporting as both a semantic construct and an adaptive process that builds trust, strengthens governance, and generates sustained financial and societal value.

ABSTRACT This study investigates how environmental, social, and governance (ESG) performance influences corporate financial performance (CFP) in the Gulf Cooperation Council (GCC) region, with a focus on the moderating role of financial constraints. Using panel data from 71 listed firms across six GCC countries during 2018–2023, a two‐way fixed effects model was used to test whether ESG engagement translates into higher profitability. The findings reveal that ESG performance significantly improves firm profitability, but this positive effect weakens when firms face higher financing frictions, highlighting the importance of capital access in converting ESG engagement into financial value. By introducing financial constraints as a moderating mechanism, the study extends evidence on the ESG‐CFP link in the underexplored GCC context and highlights the region's unique institutional and financial environment. Practical and policy implications suggest that strengthening sustainable financing mechanisms and ESG disclosure frameworks can support firms in achieving both sustainability and financial objectives.

ABSTRACT Compelled by the evolving digital landscape and increasingly stringent environmental regulations, there is a growing focus on utilising innovation, digital resources and digital information to achieve sustainability goals in the maritime industry. Rooted in the organisational information processing theory, this study examines how social and technical digital resources influence green technology innovation to achieve sustainable performance. 164 responses were collected from shipping industry professionals from diverse sectors of the industry. Findings disclosed that all five digital resources positively influence information coordination constructs. Furthermore, inter‐functional and inter‐partner informational coordination had positive correlations with green technology innovation. In addition, green technology innovation has a positive correlation with sustainable performance. The study's results contribute to the theoretical understanding of digital resources' influence on green technology innovation via organisational information processing theory. It provides another perspective on the digital or information coordination elements influencing green technology innovation and offers a tetradic understanding of sustainable performance's antecedents. Managerial implications include providing insights on digital resources for firms to consider during decision‐making and outlining a means for optimising digital resources. Additionally, it underscores the importance for firms to prioritise informational coordination and foster green technology innovation to attain sustainable performance.

ABSTRACT We examine the impact of environmental, social, and governance (ESG) performance on corporate short‐term financing structure, with particular focus on trade credit and bank loans. Using 28,785 firm‐year observations from all A‐Share listed companies in China between 2009 and 2020, we find that superior ESG performance reduces financing costs. Based on the pecking order theory, we find that such companies tend to rely more on trade credit, highlighting a substitution effect between trade credit and bank loans. This substitution effect is more pronounced for companies that face higher financing constraints, possess stronger competitive advantages, are relatively smaller in size, and operate in regions subject to stringent environmental regulations. A further examination of bank loans reveals that trade credit mainly substitutes for short‐term loans, with no significant effect on long‐term loans. Additionally, such companies benefit from bank loans at lower cost. The results remain robust after addressing concerns related to alternative measurements of key variables, endogeneity problems, and special samples. Overall, this research advances our understanding of ESG performance as a determinant of financing structure helps policymakers establish a holistic framework to improve corporate ESG performance.

ABSTRACT This study examines the relationship between environmental, social, and governance (ESG) initiatives and firm efficiency, which is assessed through two dimensions: innovation efficiency and eco‐efficiency. ESG performance is decomposed into its three pillars; namely, ESG, and board gender diversity is introduced as a moderating variable. Using social network analysis and panel data from pharmaceutical and biotechnology firms across America, Europe, and Asia from 2017 to 2023, this study explores interfirm linkages and governance dynamics within four subindustries. Findings reveal that the social pillar positively influences eco‐efficiency, indicating that firms emphasizing employee welfare, community engagement, and customer responsibility achieve a stronger economic‐environmental balance. Conversely, the governance pillar is negatively associated with eco‐efficiency, suggesting that higher compliance and monitoring costs may constrain operational sustainability. Although female directors play a vital role in shaping organizational outcomes, their moderating effect is significant only in the ESG‐innovation efficiency relationship, where they help mitigate the negative effects of ESG initiatives on innovation efficiency. However, board gender diversity does not moderate the relationship between ESG pillars and eco‐efficiency, implying its greater influence on strategic innovation than on operational outcomes. Overall, ESG initiatives and gender‐diverse boards are essential for fostering innovation, eco‐efficiency, and sustainable growth in the P&B sectors.

ABSTRACT This study examines the conditional relationship between corruption and sustainable firm growth (SFG) through the lens of financial inclusion, offering new insights into how institutional quality moderates the effects of corruption on firm‐level outcomes. Drawing on panel data from 465 non‐financial firms across nine MENA countries between 2007 and 2020, we apply a Dynamic Panel Threshold Regression (DPTR) model to assess whether financial inclusion acts as a threshold mechanism that transforms the corruption–growth nexus. The results reveal a statistically significant financial inclusion threshold at 0.250 (25%), below which CPI (low corruption) exerts a negative effect on SFG, supporting the “grease in the wheels” hypothesis. Above this threshold, the effect turns positive, aligning with the “sand in the wheels” theory. These findings suggest that financial inclusion does not simply mitigate corruption; rather, it reconfigures the institutional environment, shifting corruption from a compensatory mechanism to a systemic constraint. Our results are robust to alternative measures of growth and estimation techniques. Theoretically, we contribute to institutional theory by introducing a non‐linear, threshold‐based framework that contextualizes corruption's role in firm performance. Empirically, we offer novel evidence from a region characterized by institutional volatility, highlighting how financial infrastructure can condition firm behavior. For policymakers, the findings underscore the strategic importance of inclusive financial systems in reducing firms' reliance on informal practices and fostering more transparent, sustainable growth.