Corporate Foresight and ESG Implementation under Environmental Uncertainty: Evidence from State-Owned Banks in Indonesia

This research aims at examining the effect of corporate foresight on enhancing the implementation of Environmental, Social and Governance (ESG), as well as its impact on perceived bank performance in State-Owned Banks in South Sulawesi. Adopting a fine-grained forward-looking perspective, and based on Dynamic Capabilities Theory, Institutional Theory, and Contingency Theory perspectives, the paper postulates a moderated mediation model that ESG mediates Corporate Foresight–performance linkage and also tests for moderation effects of Environmental Uncertainty on the foresight–ESG linkage. A quantitative research design was utilised to capture primary survey data from bank customers which were subjected to Partial Least Squares Structural Equation Modelling (PLS-SEM). The results show that Corporate Foresight has a strong direct effect on ESG Adoption, which ultimately affects Satisfaction with the Bank. Second, Environmental Uncertainty acts as an enhancer of the relationship between foresight and ESG adoption (H2c), implying that contexts with high volatility may drive organizations to adopt sustainability-oriented strategies. Our study contributes to the strategic management and sustainability literature in developing countries, providing policy makers and banking executives with actionable advice on how to integrate foresight into their ESG strategies to ensure long-term resilience. Limitations and directions for future research are presented, including the need to pursue longitudinal designs and more extensive comparisons between the sectors.