UNPACKING THE ESG–FINANCIAL PERFORMANCE RELATIONSHIP: A NARRATIVE SYNTHESIS IN NORTH AMERICA

Abstract

The current research focus on the association between ESG practices and CFP among the North American organizations. In particular, it will consider the effect of ESG on corporate financial performance in the U.S. In today's reality, the inclusion of ESG issues into the organizational strategy is becoming increasingly essential because of the growth of governmental pressure, demands from investors, and the overall necessity of socially responsible practices. This study uses the narrative review approach to analyze the results of the most recent empirical researches (2020-2025) concerning the effect of ESG on the company's financial performance. The review includes three groups of empirical studies depending on whether they claim the presence of a positive, negative or a complex correlation between ESG and CFP in different sectors. Based on the findings, it is possible to conclude that in most cases, the implementation of ESG strategies can help achieve financial success over time. It is especially true for those areas which require additional attention to environmental factors (such as energy and utilities). At the same time, some negative trends can be noticed in the field, especially in the technological industry. Another aspect discussed in the literature under analysis concerns the utilization of digital solutions for ESG reporting and operations improvement.