Corporate sustainability, corporate social responsibility (CSR), and environmental, social, and governance (ESG) performance have become pivotal in understanding firm risk management and financial stability. Despite extensive research on these topics, there remains a lack of consolidated evidence on their interconnections and implications for firm risk across various contexts. This study aims to systematically explore the nexus between corporate sustainability, CSR, ESG performance, and firm risk using a systematic literature review approach. To achieve this, an advanced search was conducted in Scopus and Web of Science databases focusing on studies published between 2023 and 2024. The flow of study based on PRISMA framework. The database found (n=29) final primary data was analysed. The studies were analyzed and categorized into three themes: Corporate Social Responsibility (CSR) and Financial Outcomes, Corporate Sustainability Practices and Risk Management, and Environmental, Social, and Governance (ESG) and Firm Risk. Methodologically, this review synthesizes evidence from diverse sectors and regions, utilizing quantitative and qualitative findings from the selected articles. Key findings reveal that CSR initiatives and ESG performance significantly influence firm risk through mechanisms such as enhanced governance, transparency, and stakeholder engagement. While high ESG scores reduce systematic and idiosyncratic risks in some contexts, overinvestment in ESG can detract from shareholder value. Furthermore, the impact of corporate sustainability practices varies by industry, governance structures, and regional regulatory environments. This review underscores the critical role of integrating sustainability and ESG considerations into corporate strategies to mitigate risks and enhance long-term resilience.
A Mon, study studied this question.