Strategic ESG Orientation and Financial Resilience in Emerging Markets

This study introduces a diagnostic ESG orientation typology (Strategic, Transitional, and Compliance) to demonstrate ESG orientation, which represents the extent to which ESG practices are internalized and institutionalized within the organization, beyond an ESG disclosure score. It then seeks to establish the link between ESG orientation and financial resilience within Zambia’s agro-food sector. It thus enables context-specific conclusions beyond generalized ESG disclosure scores for emerging markets. Using an explanatory sequential mixed-methods design, based on a sample of 55 firm-year observations (2014–2024) of five listed agro-food sector firms, the firm-level analysis applies a fixed-effects panel regression of the quantitative sample. The qualitative classification of ESG orientations is guided by a structured coding framework that applies ISO IWA 42:2024 ESG principles when analysing the texts of the firms’ annual reports. Strategic ESG firms (characterized by board sustainability responsibility, long-horizon environmental investments and stakeholder engagement) were financially more resilient (in terms of ROA) than Compliance or Transitional firms. The typology offers explanatory power by connecting depth of ESG integration to profitability trajectories and proves the narrowness of ESG ratings disconnected from strategic framing. This study, unlike extant studies focusing on ESG score levels, conceptualizes ESG as an organizational orientation and proposes an ISO-aligned qualitative classification system that is applicable to emerging markets. This research extends previous studies by providing a typological lens through which the financial materiality of ESG can be understood in weak regulatory environments and thus provide novel diagnostic and policy utility.