Industry 5.0 Orientation and ESG Performance: Evidence From European Firms

This study examines whether Industry 5.0 orientation is associated with environmental, social and governance (ESG) performance among European firms. Drawing on a socio‐technical perspective, the study conceptualises Industry 5.0 orientation as a firm‐level orientation that integrates advanced digital technologies with human capability, sustainability, resilience and transparent information systems. Using Bloomberg panel data for 1682 European Union‐listed firms over 2020–2025, the findings show that Industry 5.0 orientation is positively associated with overall ESG performance and with the environmental, social and governance pillars. The results further indicate that workforce capability and ESG information transparency partially mediate this relationship, suggesting that Industry 5.0 becomes ESG‐relevant through human‐capital and information‐accountability pathways. The association is largest in lower factor market development contexts, suggesting that Industry 5.0 orientation may have greater ESG relevance where external market support is weaker. The study contributes by distinguishing Industry 5.0 orientation from generic digitalisation and by identifying the organisational mechanisms and contextual conditions through which socio‐technical transformation is linked to ESG performance.