Purpose This study aims to provide an updated systematic review on the relationship between environmental, social and governance (ESG) performance and firm risk. It addresses key gaps in previous reviews by providing an in-depth, theoretical and thematic analysis of empirical studies, identifying patterns, contradictions and areas for future exploration. Design/methodology/approach This study conducts a structured and systematic literature review focused exclusively on ESG and firm risk. This study selected 75 peer-reviewed articles using a rigorous protocol, incorporating Scopus indexing and ABDC journal rankings to ensure quality and relevance. Findings The results reveal that most studies report a negative association between ESG practices and financial and market risks. However, results vary according to ESG dimensions, risk types and contextual factors such as company size, region, macroeconomic factors and industry sector. The literature also shows significant inconsistencies in ESG measurement and theoretical framing, which contribute to the ongoing debate. Originality/value This review offers a more focused and analytical contribution to the ESG literature by moving beyond general overviews. It adds value by incorporating a theoretical framework, summarizing key empirical studies and proposing a structured agenda for future research on ESG and firm risk. In addition, in response to the pressing need to integrate ESG into risk management, this study has developed a thorough and detailed framework that identifies clear and sequential steps for integrating ESG-related risks into the core of the corporate risk management process.
Adardour et al. (2026) studied this question.