Harnessing Managerial Strategy in CSR and ESG to Drive Financial Performance amid Climate Change

This research studies the impact of Corporate Social Responsibility (CSR), environment performance, and good governance on financial performance, as measured by Return on Assets (ROA) as well as Price to Book Value (PBV), with managerial strategy as the moderator. Applying SEM-PLS to the dataset from quoted companies in Indonesia and Malaysia (2020–2024), we find that all three ESG parameters significantly contribute to both ROA as well as PBV. Managerial strategy, as represented by employee training, however, is found to not significantly moderate CSR or environment performance to financial performance. Only the effect of good governance is moderately influenced by managerial strategy. This identifies a new finding that internal strategy may selectively work according to the ESG parameter. Theoretically, the research contributes to Stakeholder Theory, Legitimacy Theory, as well as the Resource-Based View by applying human capital as a strategic resource. Practically, applying the study identifies that enhancing the quality of governance as well as employee abilities is important to advance ESG performance as well as long-term value in emerging economies.