Localizing ESG Theory in China: Policy Evolution and a Four-Tier Theoretical Framework

As the world’s second-largest economy with strong state leadership, China plays a pivotal role in global sustainability. Yet, ESG development remains constrained by a lack of theory-driven research suited to its institutional context. This study proposes a localized, policy-oriented ESG framework. Based on a Systematic Literature Review (SLR) and Latent Dirichlet Allocation (LDA) topic modeling of ESG policy documents (2014-2024), we identify key theories and map them onto China’s three-stage ESG policy evolution. The resulting framework offers theoretical and methodological guidance for China and provides insights for ESG localization in other emerging markets, highlighting China’s potential in ESG innovation and global governance.