Environmental, Social, and Governance (ESG) Integration in Bangladesh: Revealing the Role of Corporate Governance Nexus

Environmental, social, and governance (ESG) considerations have become increasingly integral to the modern business environment as stakeholders place greater emphasis on accountability and sustainability. This study examines the interaction between ESG integration and corporate governance structures in an emerging market, focusing on firms listed on the Dhaka Stock Exchange (DSE) that operate in environmentally sensitive industries during the period 2014–2021. Employing content analysis of annual and sustainability reports, we constructed an ESG disclosure index grounded in the Global Reporting Initiative (GRI) standards. The results indicate that larger boards, the inclusion of foreign directors, and the existence of audit committees are positively associated with enhanced ESG practices, whereas frequent board meetings are negatively related to ESG disclosure. Furthermore, the enforcement of corporate governance guidelines by the Bangladesh Securities and Exchange Commission has strengthened ESG reporting, although the proportion of firms engaging in such disclosure remains limited. These findings highlight the need for stakeholders—including regulators, policymakers, and academics—to promote the consistent integration of ESG principles within corporate governance frameworks.