Rationales behind managerial integration of environmental, social, and governance (ESG) in corporate framework in emerging markets

The evolving environmental, social, and governance (ESG) concerns are compelling top management to balance shareholders’ interests with broader non-financial interests and risks. The present research investigates managerial rationale for integrating ESG principles into corporate strategies within the Gulf Cooperation Council (GCC) region. Consequently, the study structures ESG rationales hierarchically to support managerial decision-making in the GCC. Structured questionnaires were administered to corporate managers across the GCC, using convenience and snowball sampling methods. The data was analyzed using Exploratory Factor Analysis (EFA) to establish the statistically significant rationales. Subsequently, the Total Interpretive Structural Modeling (TISM) and MICMAC analysis are integrated to structure the significant rationales. Therefore, EFA was used to identify significant rationales, while TISM/MICMAC was used to map interdependencies and driving power among the rationales. The findings indicate the key managerial rationales for ESG integration as (i) corporate responsibility extends beyond creating jobs, taxes, and profits, (ii) enhancing organizational reputation, and (iii) maintaining competitiveness by leveraging ESG practices to create and protect value. Further, the statistically significant rationales were categorized into independent, dependent, and linkage clusters, all arranged in a five-level hierarchical model structure. Integrating the theory of planned behavior and self-determination theory with the resilience framework further underscores the dual nature of managerial ESG motivations. Thus, the findings of this study will inform resilience-oriented ESG strategies and policy interventions.