ESG Adoption and Firm Performance: An Empirical Analysis from Emerging Economies

In today’s world, more people are; recognizing that sustainable businesses, specifically those operating under environmental, social, and governance (ESG), have been recognized as creating long-term value. Although there is limited empirical evidence to evaluate the impact of ESG on corporate performance in terms of emerging and resource-dependent economies, this study investigates the relationship between the adoption of ESG and corporate performance in Azerbaijan (a hydrocarbon-dependent economy that is undergoing both regulatory recovery as well as significant transformation related to environmental sustainability). The focus of this research will be firms which published an ESG or sustainability report from 2015 through 2024. Quantitative and qualitative analyses will use a mixed-methods approach. The quantitative portion will focus on firm-level performance measures (profitability, revenue growth, operational efficiency) before and after ESG adoption by developing descriptive and comparative analyses for each measure. The qualitative portion will consist of semi-structured interviews and/or focus groups with corporate representatives to gain managerial perspectives on barriers to implementing these ESG initiatives and their importance to the firm's strategy.In response to the above, this study will explore three primary questions: (1) the extent to which selected Azerbaijani firms have adopted ESG practices, (2) the changes in a firm's performance after ESG disclosure, and (3) the contributions of ESG integration to measurable improvements in financial and operational performance. The findings of this study are unknown at this stage, however, there will be some contribution to the less-than-average evidence available thus far on ESG within transitional economies. Furthermore, it is intended that the findings from this study will offer practical implications for all types of policymakers as well as provide insights to the roles of ESG in improving both sustainability and competitiveness within resource-dependent economies.