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Exploring the Heterogeneous Financial Value of ESG Adoption: A Global Study Across Industries and Regions

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  • Leili Soltanisehat
  • Soheil Sibdari

Abstract

Environmental, social, and governance (ESG) practices have gained substantial attention as an indicator of corporate sustainability and long‐term value creation. This study develops a novel empirical framework to explore the heterogeneity in the financial aspects of ESG engagement across regions, industries, and firms. Drawing on 50,000 firm‐year observations (2002–2022), across seven regions and 23 industries, we quantify the financial impact of ESG and its subcomponents across institutional contexts. Our findings show that ESG has a particularly strong positive impact on revenue in developing and institutionally weaker markets, suggesting its role in filling institutional voids. Although the industry‐level variation is insignificant, regional heterogeneity is substantial. Disaggregated analysis of ESG pillars shows that environmental and social pillars have a positive impact on revenue growth, though varying by region. This research contributes to the ESG literature by offering a multilevel perspective to guide strategic investment, stakeholder engagement, and sustainable operations.

Suggested Citation

  • Leili Soltanisehat & Soheil Sibdari, 2026. "Exploring the Heterogeneous Financial Value of ESG Adoption: A Global Study Across Industries and Regions," Business Strategy and the Environment, Wiley Blackwell, vol. 35(2), pages 2654-2674, February.
    • Handle: RePEc:bla:bstrat:v:35:y:2026:i:2:p:2654-2674
    DOI: 10.1002/bse.70300
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