ESG Integrity and Financial Performance: The Interplay Between Sustainability and Earnings Management

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Researchers can use the proposed conceptual framework to avoid 'construct conflation' between governance and ESG, and focus on causal identification and granular measurement of real versus accrual-based earnings management.

🏢実務担当者:Corporate sustainability teams should note that ESG credibility requires strong internal governance and high-quality reporting; otherwise, ESG efforts may be perceived as masking earnings management.

🏛政策担当者:Policymakers can leverage the findings to design disclosure regulations that incentivize genuine ESG integration rather than symbolic compliance, especially in weak institutional settings.

There is substantial empirical heterogeneity in the literature on the intersection between ESG performance and financial outcomes. To address this fragmentation, we foreground ESG integrity, the alignment between sustainability claims and high-quality financial reporting, as the mechanism through which ESG is translated into value. Using Scopus and Web of Science, the study identifies and screens 205 peer-reviewed articles published until October 2025 that jointly address ESG, earnings management, and financial performance. Using VOSviewer and Bibliometrix, we map the conceptual and intellectual structure and synthesize the evidence via interdisciplinary integration. We identify four primary intellectual pillars that govern the ESG–financial performance relationship: national institutions, governance architectures, disclosure quality, and earnings quality. The results suggest a “conditional chain” where ESG tends to be associated with sustained financial value when anchored in rigorous internal governance and high-quality reporting. Conversely, in weak institutional settings, ESG often serves as a “masking” mechanism for managerial opportunism and earnings management. The study reveals a significant shift in the literature from broad corporate social responsibility narratives toward material ESG metrics, gender diversity, and the “Twin Transition” (green and digital). This paper moves beyond traditional descriptive reviews by introducing a conceptual framework to mitigate “construct conflation” between governance and ESG. It provides a critical roadmap for future research, emphasizing the need for causal identification and granular measurement of real versus accrual-based earnings management.

• semanticscholar https://doi.org/10.3390/su18041764first seen 2026-05-05 23:15:12