Explaining ESG reporting preparedness through institutional and organizational factors among manufacturing firms in Bangladesh

Abstract The accelerating global demand for Environmental, Social, and Governance disclosure has outpaced firms’ internal readiness in emerging economies, creating a widening capability expectations gap. Drawing on Institutional Theory and the Resource-Based View, this study examines how regulatory pressure, stakeholder pressure, accounting capability, and ESG awareness interact to shape ESG preparedness. This latent organizational capacity must precede disclosure among manufacturing firms in Bangladesh. Using a cross-sectional survey of 354 accounting, finance, and sustainability/compliance professionals representing manufacturing firms, the proposed model was estimated with Partial Least Squares Structural Equation Modeling (PLS-SEM). This study tests an integrated model in which regulatory pressure, stakeholder pressure, and internal accounting capability jointly determine ESG preparedness. At the same time, ESG awareness serves as a cognitive enabler, and regulatory and stakeholder pressures act as coordinating mechanisms that lower perceived barriers. The findings extend prior literature by demonstrating that, in a regulatory-developing, export-dependent emerging economy, regulation functions less as a compliance cost and more as a roadmap that lowers perceived barriers while building internal capability. The study contributes to sustainability accounting theory by positioning ESG preparedness as a distinct pre-disclosure construct. It provides segmented implications for manufacturing firms, regulators, professional accounting bodies, and global buyers sourcing from Bangladesh.