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ABSTRACT This study analyzes the relationship between environmental, social, and governance (ESG) performance and corporate reputation among Brazilian companies listed in the 2023 Corporate Reputation Monitor (MERCO). Using quantitative methods—descriptive and inferential statistics combined with cross‐sectional linear regression—the research examines how ESG performance and ESG risk indicators relate to firms' reputational standing. The sample comprises 46 companies from different sectors, and the results reveal a positive and statistically significant association between ESG performance and corporate reputation. This finding underscores the strategic role of ESG practices in strengthening market image, aligning corporate behavior with social and environmental expectations, and fostering stakeholder trust. The study has some limitations. It focuses on a single year (2023), which may capture post‐COVID‐19 volatility and relies on a relatively small sample restricted to MERCO‐listed firms and a limited set of ESG data providers, which may constrain the generalizability and robustness of the results. Future research should adopt a multi‐year perspective, incorporate additional ESG rating agencies, and explore sector‐specific dynamics, particularly in highly exposed industries such as banking, petrochemicals, and agribusiness. Overall, the study contributes to the sustainability and business‐strategy literature by showing that investment in ESG initiatives not only benefits society and the environment but also reinforces corporate reputation, competitive positioning, and long‐term value creation.
Aguiar et al. (Mon,) studied this question.