Beyond compliance: Embedding ethics in ESG reform for emerging economies

Environmental, Social, and Governance (ESG) reforms are expanding across emerging economies, yet many initiatives struggle to achieve ethical legitimacy in practice. Prior research has emphasized the adoption of disclosure and the development of metrics, while offering a limited explanation of why ESG systems often remain vulnerable to symbolic compliance, exclusion, and trust deficits in institutionally constrained contexts. The study addresses this gap by examining how structural conditions shape the ethical quality of ESG governance, particularly in relation to fairness, accountability, legitimacy, inclusion, and rights. A qualitative, interpretive design was adopted, drawing on the analysis of 56 publicly available documents, including corporate ESG disclosures, regulatory and policy frameworks, and civil society assessments. NVivo-assisted thematic coding integrates ethics-informed deductive categories with inductive theme development to identify recurring barriers and their normative implications. The findings indicate that fragmented mandates create compliance ambiguity and privilege well-resourced incumbents, while weak enforcement mechanisms enable disclosure without substantive accountability. Trust deficits among investors, regulators, and local communities further undermine legitimacy, especially where stakeholder engagement is perceived as formalistic. In addition, infrastructure and data limitations restrict participation by smaller actors, and the growing digitization of ESG systems introduces under-regulated risks related to privacy and algorithmic opacity. The study reframes ESG reform in emerging economies as an ethical governance challenge and identifies adaptive pathways for building more credible, inclusive, and ethically robust ESG systems.