ESG, innovation, and financial performance: a systematic literature review
Abstract
The purpose of this study is to insvestigate the characteristics of theoretical-empirical models described in the scientific literature concerning the relationships among ESG aspects, innovation, and financial performance. Following the PRISMA protocol and the Methodi Ordinatio, and using a structured framework applied to 52 scientific journal articles. The authors map the main relationships across these constructs and show how institutional, sectoral and methodological factors shape their interactions. The authors find that innovation frequently strengthens the positive influence of ESG practices on financial performance, whereas country-level institutional factors moderate these effects. The theoretical-empirical model was developed based on a reality that may differ significantly from those in other regions. Considering the importance of institutional context in empirical outcomes, future studies should aim to construct article portfolios for SLRs focused on specific contexts. This would enable exploration of ESG-INNOV-FP relationships while accounting for country-specific factors. The findings encourage future research that broadens geographic diversity and adopts more robust analytical techniques. The authors generate social impact by clarifying how ESG-driven innovation supports the Sustainable Development Goals and by highlighting the underrepresentation of Global South contexts. The authors advance theory by integrating bidirectional and mediating mechanisms into a theoretical-empirical model informed by the frequency of results, offering a more comprehensive explanation of how ESG and innovation co-evolve.