Stakeholders' perspectives on critical success factors for environmental social and governance (ESG) implementation.

Environmental Social and Governance (ESG) has emerged as a sensitive issue, attracting the attention of a large audience that could not be ignored. Government bodies continue to pass regulations mandating organizations to comply with ESG principles. However, many organizations have had unsatisfactory results while promoting sustainability ideals due to various challenges. To achieve ESG goals, the present study offers a thorough framework for ESG implementation across organizations based on the critical success factor (CSF) theory and the opinions of diverse stakeholders. Following a literature review and brainstorming with ESG experts and academicians, a survey questionnaire was sent to 400 respondents to evaluate the 20 factors identified as 'super-set' CSFs for ESG implementation. This paper represents a novel attempt in ESG research as it conducts a survey supported by exploratory factor analysis (EFA). The interactions between the significant CSFs were studied by employing total interpretative structural modeling (TISM) and fuzzy MICMAC approach. ESG implementation is found to be highly driven by firm characteristics, earnings quality, and environmental performance, which can be argued to be the fundamental determinants of ESG implementation. According to these findings, organizations' leadership should (1) focus on effectively structuring firms' attributes to swiftly operate the ESG implementation framework, (2) ensure consistent business earnings that signal improved future performance, and (3) continuously monitor and assess their environmental performance. These efforts should be supported by engaging with diverse stakeholder groups, each playing its respective role in ESG implementation. Consequently, ESG implementation across organizations is anticipated to accelerate with thoughtful organizational coordination, strategic planning, and compliance with authoritative policies. However, rather than solely focusing on creating ESG disclosure laws, policymakers should also focus on creating better ESG outcomes through effective ESG implementation. Therefore, this research offers valuable insights into improving ESG practices, which facilitates the adoption of mandatory ESG disclosure regulations.