A Sequential Process Framework for ESG Activation: Translating Platform Capabilities Into Organizational Performance

This study proposes a sequential process through which organizations translate data collected and managed by environmental, social, and governance (ESG) platforms into institutionalized sustainability performance shifting the attention from ESG measurement for reporting to data activation for the organizational strategy. We develop an integrated framework and empirically test it using survey data from 580 corporate entities headquartered in EU‐27 countries and subject to Corporate Sustainability Reporting Directive (CSRD)‐related disclosure obligations. The data are analyzed using partial least squares structural equation modeling (PLS‐SEM). The empirical results highlight, on the one hand, the ability of the ESG platform to act as a critical technological antecedent capable of significantly driving ESG–management by objectives (MBO) integration ( β = 0.542); and, on the other hand, how the integration of sustainability metrics into performance management systems directly promotes the rigorous alignment of managerial incentive structures ( β = 0.612), while exerting a significant direct effect on overall sustainability performance ( β = 0.276). The paper highlights how it is possible to turn double materiality and regulatory demands into integrated control mechanisms, showing that ESG tracking delivers value only when coupled with data‐driven MBO and ESG‐linked compensation.