Inclusive Wealth and <scp>ESG</scp> Practices: Financial Impacts in a Global Context

ABSTRACT This study explores the relationship between ESG practices and corporate financial outcomes across 38 economies from 2013 to 2022, with a focus on the moderating role of regional sustainability, proxied by inclusive wealth. The findings reveal significant disparities in ESG performance, with European firms leading globally while those in Asia, particularly Southeast Asia, lag in ESG scores but exhibit stronger financial benefits from ESG engagement. Inclusive wealth plays a critical moderating role in the ESG‐finance relationship, serving as key regional sustainability indicators. Specifically, human and natural capital positively moderate the financial impact of corporate environmental efforts. These results suggest that inclusive wealth captures structural conditions that shape ESG effectiveness and can inform region‐specific sustainability strategies. This study highlights the importance of integrating long‐term, multidimensional sustainability indicators into ESG evaluation frameworks to better align corporate strategies with economic and institutional contexts, thereby enhancing both firm performance and broader sustainable development outcomes.