Beyond ESG Scores: Sustainability Readiness as a Domain‐Specific Organizational Capability

ABSTRACT Composite ESG scores obscure whether cross‐firm differences reflect genuine sustainability capability or aggregation artefacts. This paper develops sustainability readiness as a transparent, domain‐specific construct: the observable preparedness of firms to generate, verify, integrate, and communicate decision‐useful sustainability information within specific transformation domains. Using 2025 World Benchmarking Alliance data covering 158,075 indicator‐level observations for 2000 firms, aggregated into 5200 firm–transformation observations, we examine readiness across Climate and Energy, Digital, Food and Agriculture, Nature, Social, and Urban transformations. A stacked firm–transformation design with fractional response models and alternative outcome definitions shows a robust EU readiness premium relative to US firms, a selective and domain‐dependent Asia discount, and a positive association between public ownership and readiness. The findings show that institutional differences in sustainability reporting are not uniform but structured by domain‐specific information‐processing and governance demands, offering an auditable alternative to opaque ESG composites.