From Compliance to Revenue Generation: How ESG Practice Opens up Profit Growth Space for Traditional Enterprises

¹ Maxwell school, Syracuse University, 13210, United States
² School of Finance, Tianjin University of Finance and Economics, 300222, Tianjin, China

^* Corresponding author: YangZongheng@stu.tjufe.edu.cn

Abstract

ESG (environment, society and Governance) has leapt from marginal issues to core strategic elements of business. Traditional enterprises used to regard ESG as a compliance burden, but with the capital market, consumers and investors turning to the responsibility profit orientation, ESG is transforming from a “compliance pass line” to a key engine driving enterprise transformation, reshaping competitiveness and creating economic benefits. Resource intensive and high emission enterprises are facing the dual pressure of growth slowdown and sustainable challenges, and it will miss major opportunities to regard ESG as a “cost center”. This review focuses on how ESG practices transcend compliance and open up profit growth space for traditional enterprises. The core is to build and analyze the value creation path with digital transformation (DT) and green transformation (GT) as key levers and in-depth synergy of the two. In addition, although this paper focuses on traditional enterprises under heavy pressure (especially high emissions), the analysis framework and some conclusions are universal.