Corporate Equality and Sustainable Development: Evidence From <scp>ESG</scp> Performance in European Listed Firms

ABSTRACT This study examines the relationship between corporate equality and ESG performance in large European listed firms, with particular attention to the role of equality‐oriented practices in supporting sustainable development. Using a panel dataset of 300 companies included in the Euro Stoxx 300 index over the period 2012–2024, we analyze whether corporate equality—operationalized through a composite index capturing diversity, human capital development, and workplace inclusion—acts as a driver of corporate sustainability. Employing Ordinary Least Squares, fixed‐effects, and random‐effects models, the analysis controls for firm‐level financial characteristics and unobserved heterogeneity. The results reveal a positive and significant relationship between overall corporate equality and ESG performance, particularly within the environmental and social pillars. Diversity and human capital development emerge as key contributors to sustainability outcomes, while workplace inclusion shows heterogeneous effects across ESG dimensions, with a stronger association with governance performance. These findings suggest that equality‐oriented corporate practices enhance firms' capacity to address stakeholder expectations and implement sustainability strategies, although their impact varies across ESG pillars. This study contributes to the literature by providing robust longitudinal evidence from the European context and by disentangling the differential effects of corporate equality components on ESG performance. The results offer relevant implications for managers, investors, and policymakers seeking to integrate equality, inclusion, and sustainability into corporate governance frameworks.