Evaluating ESG Strategies for Corporate Sustainability in the Context of Climate Risk and Regulatory Pressure

Abstract

Environmental social and governance strategies have become an essential component of corporate sustainability and responsible business practices in the modern global economy. Increasing climate risks and expanding regulatory requirements have forced organizations to adopt sustainability frameworks that address environmental impact, social responsibility, and governance accountability. Investors, policymakers, and stakeholders increasingly evaluate corporate performance not only through financial metrics but also through environmental sustainability and ethical governance indicators. As climate change intensifies and governments introduce stricter environmental regulations, organizations face significant pressure to integrate environmental social and governance strategies into their operational and strategic decision-making processes. This study evaluates the effectiveness of environmental social and governance strategies in enhancing corporate sustainability within the context of climate risk exposure and regulatory pressure. The research proposes a conceptual model that examines the relationships between climate risk awareness, regulatory pressure, environmental social and governance strategy implementation, and corporate sustainability performance. The study applies quantitative research methods and uses Structural Equation Modeling with Smart Partial Least Squares to analyze data collected from corporate managers, sustainability officers, and environmental compliance specialists working in various industries. The results demonstrate that climate risk awareness and regulatory pressure significantly influence the adoption of environmental social and governance strategies by organizations. Furthermore, the findings reveal that effective implementation of environmental social and governance practices positively contributes to long term corporate sustainability performance. The research highlights the strategic importance of integrating environmental and governance policies within corporate management frameworks in order to address environmental challenges and regulatory expectations. This study contributes to sustainability management literature by providing empirical evidence regarding the role of environmental social and governance strategies in strengthening corporate resilience and sustainable development. The findings provide valuable insights for policymakers, corporate leaders, and sustainability practitioners seeking to enhance organizational sustainability in an era characterized by increasing climate risks and evolving environmental regulations.