Human Capital Management in the Digital and ESG Era: A Systematic Review of Trends, Gaps and Strategic Implications

Human capital management (HCM) is undergoing a transformative shift, driven by rapid digitalization and rising environmental, social, and governance (ESG) expectations. This systematic literature review aims to synthesize existing research on how digital tools and ESG frameworks are reshaping HCM strategies, practices, and outcomes across sectors. A structured review of peer-reviewed articles from 2015 to 2025 was conducted across Scopus. Thematic analysis identified six key areas: digital transformation and data-driven HCM, ESG-aligned and sustainable HCM strategies, quantification of human capital value, sector-specific adaptations, leadership and engagement mechanisms, and implementation challenges with ethical implications. Findings reveal that AI, predictive analytics, and human resource information systems (HRIS) are optimizing workforce planning, while ESG-integrated practices enhance organizational legitimacy and stakeholder trust. New performance metrics such as moral quotient indices and multi-criteria decision-making models are enabling more holistic evaluations of human capital investments. Sectoral variations and leadership styles significantly shape implementation success, and engagement acts as a consistent mediator in driving performance outcomes. Ethical risks such as algorithmic bias, surveillance, and data privacy violations present persistent challenges, necessitating transparency frameworks, fairness audits, and employee-centered governance. This study advances the literature by offering an integrated framework that connects technological innovation, ESG accountability, and strategic workforce development. The findings have implications for both practitioners and researchers seeking to future-proof human capital strategies in a volatile global landscape.