Environmental, social, governance and sales in South Korean distribution industry

Purpose This study examines how environmental, social, and governance (ESG) activities influence sales performance in the South Korean distribution industry, focusing on the moderating roles of advertising intensity and firm type (wholesale vs. retail). Design/methodology/approach Using panel data from 50 publicly listed wholesale and retail firms from 2012 to 2021, fixed-effects regression models were estimated. ESG performance was measured using annual evaluation scores from the Korea Institute of Corporate Governance and Sustainability (KCGS). Findings The direct effect of ESG activities on sales was not statistically significant. However, advertising intensity strengthened the relationship between overall ESG performance and sales. When ESG dimensions were analyzed separately, only the interaction involving the social dimension showed a significant positive relationship with sales. ESG effects were also stronger for retailers than for wholesalers, suggesting that consumer-facing contexts enhance ESG effectiveness. Originality/value This study extends ESG research by focusing on short-term sales outcomes and highlighting the roles of ESG heterogeneity, communication, and firm type in shaping ESG effectiveness.