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Frontiers in Sustainability ·

Volume 7 - 2026 | https://doi.org/10.3389/frsus.2026.1871060

From traditional to sustainable business models: an organizational transformation driven by ESG

  • Elen Cristina Bravos Giupponi1
  • Camila Fabrício Poltronieri2
  • Ana Luiza de Oliveira Maia1
  • Otávio José de Oliveira1*corresponding author
  1. 1Faculty of Science and Engineering, Production Engineering Department, São Paulo State University, Guaratinguetá, Brazil
  2. 2Lorena School of Engineering, Department of Production and Chemical Engineering, University of São Paulo, Lorena, Brazil
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Abstract

Environmental, Social, and Governance (ESG) criteria are highly relevant for assessing organizational sustainability and generating long-term value. However, the literature still lacks an integrated synthesis explaining how the diverse ESG-boosting elements identified across studies converge into broader organizational drivers that support sustainable organizational transformation. This work proposes an integrated set of drivers of ESG development to support the transition from traditional to sustainable business models. A systematic literature review was conducted, employing Content Analysis to code and categorize the 52 selected articles published between 2021 and 2026, selected through a structured Scopus search adapted from the PRISMA protocol. Through an inductive, iterative process, 114 ESG-boosting elements initially identified in the literature were consolidated by semantic and functional affinity into 30 conceptually distinct Boosting Elements, which were subsequently clustered into six organizational drivers. This work delivers a set of interrelated drivers that operate as a coordinated, feedback-driven system: Regulatory and Financial drivers establish legitimacy criteria and economic incentives of external pressures, Organizational and Technological drivers reconfigure internal structures and innovation systems, the Relational driver anchors these changes in the value chain, and the Cognitive driver sustains the process through mindset and cultural internalization. A diagnostic tool linking each driver to objective questions and priority actions is also proposed. Identifying, benchmarking, and clustering ESG-enhancing elements into an integrated, comprehensive framework advances the current understanding of ESG-driven organizational change. It also illustrates how these mechanisms interact dynamically. In practice, the proposed drivers and diagnostic tool offer managers, stakeholders, regulators, and investors clear guidance for assessing ESG and supporting the shift to sustainable business models.

Keywords

1 Introduction

In the global context of frequent extreme weather events, social inequalities, human rights violations, and scandals involving corruption and shady dealings, environmental, social, and governance issues have emerged as critical constraints on economic development, leading to the need for corporate transformation through the concept of Sustainable Development (SD), in which the Environmental, Social, and Governance (ESG) pillars represent the three central dimensions for measuring sustainable organizational development capabilities (Chen et al., 2025b; Niu and Wang, 2024). Since 2004, the United Nations (UN) has advocated integrating ESG into investment decisions, a trend that has evolved into international evaluation criteria adopted by economic entities (Zhu and Huang, 2023; Burgstaller, 2022). The UN’s 2030 Agenda for Sustainable Development reinforces this movement, calling for systematic transformation and innovation in the environmental, social, and governance dimensions of companies through the Sustainable Development Goals (SDGs), which provide political, strategic, tactical, and operational institutional innovation guidance (Yan et al., 2025).

In corporate performance evaluations, sustainability has become a consistent practice because it promotes long-term economic viability by shifting the focus from maximizing immediate profits to sustainable development and strategic resilience (Beknazarov et al., 2025; Zhu and Huang, 2023). By integrating ESG pillars, organizations build a unique path to reach the SDGs and overcome challenges such as climate change, talent retention, and trust and reputational risks (Ao et al., 2025; Mufungizi and Mpaka, 2025; Hsu and Chang, 2026). Furthermore, ESG practices serve as a risk management tool, providing a “safety net” during market crises and increasing their attractiveness to investors and creditors, thereby lowering the cost of capital and enhancing transparency (Cheng and Zhao, 2025; Hu et al., 2024; Afanas’ev and Shash, 2022). By aligning corporate operations with social and environmental values and emerging regulatory pressures, companies ensure legitimacy and accountability, transforming challenges into opportunities for market leadership and operational efficiency (Ao et al., 2025; Khan et al., 2024).

This organizational shift has been driven, among other factors, by regulations such as the European Union’s Corporate Sustainability Reporting Directive (CSRD) and guidelines from the International Sustainability Standards Board (ISSB), making ESG reporting the primary corporate vehicle for demonstrating a commitment to sustainability, risk management, and value creation (Chung et al., 2023; Vijaya et al., 2026). Some studies have investigated potential drivers of organizational sustainability and ESG performance. Kumar and Shah (2025), Li P. et al. (2025), and Sun et al. (2025) identified technological advancement as the primary driver of improvements in ESG performance. Meanwhile, Klaro Ramires and Veselova (2024), López-Cabarcos et al. (2025), and Tran and Nguyen (2023) focused on how administrative structure and human commitment drive the ESG agenda from the inside out. According to Bebic et al. (2025), Kammoun et al. (2024), and Ompusunggu et al. (2025), investor perception compels companies to adopt ESG initiatives. Meanwhile, Gidage and Bhide (2025), Guo and Wang (2025), Zhang S. et al. (2025), and Ao et al. (2025) argue that the state and the macroeconomic environment induce sustainable organizational behavior. Other previous articles have examined ESG, sustainable business models, and organizational transformation from different perspectives. They predominantly focus on specific dimensions, sectors, or methodological approaches, as technological advancement (Alkaraan et al., 2022; Chen et al., 2025b; Wang and Zhang, 2025); administrative structure and human commitment (Hsu and Chang, 2026; Phuong et al., 2025; Zhu and Huang, 2023); investor perceptions (Beknazarov et al., 2025; Koundouri et al., 2025; Peloso Vasconcelos et al., 2025); and macroeconomic and state-level pressures (Ao et al., 2025; Fan et al., 2025; Runqi and Ren, 2022). Other authors like Afanas’ev and Shash (2022), Beknazarov et al. (2025), and Chung et al. (2023) refer broadly to “ESG Transformation” drivers; Ao et al. (2025) and Cheng and Zhao (2025) frame ESG as a driver of “Green Transformation”; and Hsu and Chang (2026) describe the institutionalization of ESG without naming drivers. Although they identify some boosting elements, these articles point out that there is still a need to fully explore the internal causes and specific organizational processes that lead to changes in performance.

However, important aspects, such as technological, internal/administrative factors, and external market pressures, are addressed in isolation in these studies, highlighting the fragmented nature of this topic. Furthermore, they do not integrate ESG into the corporate management system, which complicates the transformation of traditional business models and often reduces these efforts to isolated or superficial initiatives. Consequently, the literature still lacks an integrated synthesis explaining how the diverse ESG-boosting elements identified across studies converge into broader organizational drivers that support sustainable organizational transformation (Afanas’ev and Shash, 2022). Besides, there is a gap in understanding of the internal processes and operational mechanisms that enable companies to build new ESG-based governance systems, and another regarding the structural changes that lead to the success of ESG practices, which constitutes an obstacle for companies to outline consistent trajectories of sustainable transformation (Xi and Wang, 2024; Hu et al., 2024). This scenario has proven a recurrent barrier to identifying ESG materiality, that is, which company processes are most significant in Environmental, Social, and Governance terms for its investors and other stakeholders (Hsu and Chang, 2026).

Thus, the research gap this work addresses is the need to develop a sustainability solution integrated into organizations, as indicated by Cheng and Zhao (2025), Hsu and Chang (2026), and Yan et al. (2025). Therefore, the research question guiding this work is: How can sustainability be fostered in organizations to make them more environmentally regenerative, socially responsible, and economically resilient? To answer this, the objective is to propose a set of drivers to promote sustainable organizational transformation, based on the pillars of ESG. This work adopted a Systematic Literature Review as its research method, employing the Content Analysis technique to code and categorize the corpus. By doing so, this work contributes primarily to the literature on sustainable organizational transformation and sustainable business models by developing an integrated framework that synthesizes sparse evidence into six interrelated organizational factors. Rather than examining isolated ESG factors, the proposed framework explains how these factors collectively support the transition from traditional business models to sustainable ones, thereby promoting a theoretical understanding of ESG-driven organizational transformation. From a practical perspective, the proposed drivers provide managers and stakeholders with structured guidance for incorporating ESG into organizational decision-making and facilitating the transition from traditional to sustainable business models.

2 Theoretical background

This section presents the concepts of traditional and sustainable business models and contrasts both approaches. The traditional business model prioritizes maximizing shareholder profits and treats social and environmental issues as secondary (Stubbs and Cocklin, 2008; Bocken et al., 2014). In contrast, the sustainable business model integrates environmental, social, and economic dimensions in a balanced manner, with the Triple Bottom Line framework gaining prominence as a key approach for its implementation (Ao et al., 2025; Uzliawati et al., 2023). This tripartite structuring is not limited to the strategic level: prior content-analysis-based research has similarly organized sustainability-related elements into social, environmental, and economic sub-dimensions, reinforcing that a balanced integration of the three pillars must be embedded in the firm’s declared strategy (Nascimento et al., 2024). Within the business model literature, value creation, value delivery, and value capture are widely recognized as the core dimensions through which organizations generate, provide, and appropriate value (Nascimento et al., 2025; Trizotto et al., 2024). In the context of sustainable business models, these dimensions are progressively reshaped by Environmental, Social, and Governance (ESG) pillars. Rather than examining these dimensions individually, the present work focuses on identifying the organizational drivers that enable this transformation process across business models.

Practical examples are presented in the fashion and agrotourism sectors. In the former, organizations use technologies such as blockchain and artificial intelligence to enable closed-loop systems and reduce waste (environmental dimension), ensure traceability and transparency throughout the production chain (social dimension), and develop models based on access, efficiency, and material innovation (economic dimension) (Ostermann et al., 2021). In the context of agritourism, initiatives have sought to integrate environmental, social, and economic dimensions by promoting sustainable production practices and regional traditions (environmental dimension), fostering inclusion, job creation, and the strengthening of local communities (social dimension), and promoting income generation through agricultural and hospitality activities (economic dimension) (Dionizi and Dhora, 2025). Therefore, for an organization to be truly sustainable, it is necessary to promote a structural transformation of its business model, rather than the ad hoc incorporation of environmental and/or social aspects (Ao et al., 2025). However, most organizations still tend to prioritize the environmental and economic dimensions at the expense of the social dimension (Ostermann et al., 2021). An example of this is the beverage industry, which has been striving to recycle its packaging and reduce its carbon emissions while maintaining the production and sale of sugary drinks as its primary activity, which are widely associated with health problems (Bocken and Short, 2021).

One alternative is to use the Environmental, Social, and Governance (ESG) pillars as criteria for sustainable organizational transformation. ESG has its roots in the social and environmental movements of the 1960s and 1970s, which drove corporate social responsibility (CSR). In the 1980s and 1990s, it evolved alongside ethical investing and the development of standards and reporting (Khan et al., 2024). However, ESG was formally consolidated in the 2000s, more precisely with the release of the “Who Cares Wins” report in 2004, which resulted from an initiative by financial institutions that responded to an invitation from then-United Nations Secretary-General Kofi Annan, to develop recommendations and guidelines aimed at integrating environmental, social, and governance issues into the financial market (UN, 2004; Khan et al., 2024). Then, in 2006, the United Nations released the Principles for Responsible Investment (PRI), which established ESG as a criterion for assessing a company’s impact on society and the financial environment (Khan et al., 2024; Beknazarov et al., 2025). Since then, ESG has gained momentum, especially following the Paris Agreement (2015) and, more intensely, after 2020, becoming one of the key criteria for assessing corporate sustainability (Khan et al., 2024). In this context, companies that strategically incorporate these pillars tend to lead technological advancements, explore new markets, and generate a sustainable competitive advantage (Shmelev and Gilardi, 2025; Widyantoro et al., 2025).

However, significant challenges remain, as most financial actors still disregard ESG pillars as priorities, favoring short-term gains over the long-term perspective characteristic of ESG, which can affect organizations’ survival over time (Bocken and Short, 2021; Khan et al., 2024; Ao et al., 2025). In the case of the environmental pillar, many organizations have not prepared for climate change, increasing risks for traditional businesses, including insurers that continue to insure companies in the fossil fuel sector, thereby putting their own existence at risk (Umakanth, 2024). As for the social pillar, human rights violations still occur in many organizations, encompassing issues such as harm to people’s health resulting from environmental pollution, health and safety failures, child labor, or labor analogous to slavery, as well as discrimination based on race, gender, or sexual orientation (Ostermann et al., 2021; Widyantoro et al., 2025). Regarding the governance pillar, corruption significantly increases the likelihood of a company defaulting, raising its risk and hindering access to credit. As a result, financing costs rise, and there are negative impacts on the credit performance of financial institutions (Umakanth, 2024; Widyantoro et al., 2025).

3 Research method

To conduct this work, we employed the scientific method of Systematic Literature Review (SLR) with the Content Analysis technique, which enables rigorous, structured examination and systematization of textual data. The SLR method is used to map, evaluate, and synthesize the body of knowledge in a rigorous, transparent, and replicable manner, being necessary when seeking to formulate research questions that expand knowledge, consolidate the best evidence to guide policies and practices, or resolve a lack of consensus on concepts and definitions in the academic literature (Tranfield et al., 2003). Complementary, the Content Analysis technique has been widely used because it enables the analysis and organization of knowledge found in the scientific literature through a systematic process of coding and categorization, allowing for the identification of patterns, relationships, and analytical categories based on the analyzed literature (Nobrega Dos Santos et al., 2025; Elo et al., 2014). This technique proved suitable for this work, as it enabled the identification and organization of ESG drivers in the literature, which were subsequently analyzed to propose drivers focused on sustainable organizational transformation. Besides, to ensure a transparent and reproducible sampling process for constructing the analytical corpus, an adaptation of the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) protocol was integrated (Page et al., 2021).

3.1 Definition of the basic elements of research (step 1)

The methodological framework adopted in this work is presented in Figure 1, which outlines the sequential steps used in its development. These steps were structured to ensure that the proposed objective was met and that the analysis was conducted systematically, from defining the initial elements to identifying the drivers of organizational transformation.

Research workflow.
Figure 1. Research workflow.

Figure 1 summarizes the methodological workflow adopted in this work, illustrating the sequential research phases from problem definition to the development of the proposed framework. As shown, the basic elements for this scientific study were defined: the topic, the research gap, the research question, the objective, and the method. The study’s stages were planned to ensure that the objective was achieved, the research question was answered, and the research gap was addressed. To construct the analysis framework, a structured search was conducted in the Scopus database. The systematic selection and screening of the literature, depicted by adapting the PRISMA flow diagram (Figure 2), served as the structured data retrieval phase, after which Content Analysis was applied to identify, code, and map the ESG drivers for sustainable organizational transformation.

Search strategy used.
Figure 2. Search strategy used.

The search was refined by applying exclusion criteria, including the publication period between 2021 and 2026, which corresponds to over 94% of this theme’s development indexed on Scopus; document type (only articles and reviews) to ensure peer-reviewed documents rigorously; publication stage (final documents only) that indicates an unchangeable version; and language (English) corresponding to 96% of the total amount. After a preliminary analysis of the results, a predominance of studies associated with the term “Digital Transformation” was observed, which could introduce bias in identifying ESG drivers. Therefore, documents with this term in the title were excluded to avoid restricting or skewing the analysis (Figure 2). It should be noted that two documents were not accessible due to the absence of a DOI and were therefore disregarded in subsequent stages of the analysis (see the complete list of articles in Supplementary Table S1). The content analysis was conducted in three phases: prospecting and preparation of documents for analysis; exploration of documents and data processing; and presentation and discussion of results, adapted from Elo et al. (2014).

3.2 Identification of ESG boosting elements (step 2)

In Step 2, conceptually similar elements, originally described with different terminology in the literature, were standardized through a semantic analysis to identify and eliminate redundancies. This standardization process followed an inductive, iterative logic. Rather than applying a predefined coding scheme, the categories emerged progressively from repeated readings of the corpus: the initial 114 driving elements, extracted verbatim from the 52 articles using the research question as a guide, were compared in terms of definitions, functions, and mechanisms of action. Elements describing the same underlying mechanism under different terminology were merged; the process was repeated across successive readings until new occurrences no longer introduced novel information but instead reiterated variations of previously identified elements (theoretical saturation), yielding 30 conceptually distinct Boosting Elements (BE#01–BE#30). For example, elements originally labeled in the literature as ‘ESG disclosure quality’, ‘anti-greenwashing taxonomies’, and ‘reduction of information asymmetry through classification tools’ were judged to share the same functional mechanism (increasing the verifiability of ESG information disclosed to stakeholders) and were consolidated into a single element, BE#25 Transparency. Boosting Elements are defined in this work as recurring practices, capabilities, or organizational dynamics identified in the literature that actively drive organizations’ progress toward ESG-based sustainable transformation. They constitute the finest-grained analytical unit of this study and, in Step 3, were grouped by conceptual affinity into the six broader drivers (Regulatory, Financial, Organizational, Technological, Relational, and Cognitive) presented in Section 5. In doing so, the BEs provide a standardized vocabulary that reduces the terminological fragmentation identified in the Introduction, in which the same underlying mechanism is described inconsistently across the literature.

3.3 Clustering and systematization of ESG boosting elements (step 3)

In Step 3, the Boosting Elements (BE) were clustered by conceptual affinity, based on the mechanisms identified in the literature. To this end, various dimensions were considered, such as external pressure, economic incentives, organizational capabilities, leadership, technological innovation, relational dynamics, and a shift in mindset. In this regard, the authors focused on the role each driving factor played in the dynamics of sustainable organizational transformation. The grouping criterion adopted was based on the role each driving factor played in the dynamics of sustainable organizational transformation, thereby enabling their organization into coherent and analytically consistent sets.

3.4 Proposal of drivers for ESG-driven organizational transformation (step 4)

To achieve the objective of this work, the 30 identified BE were grouped into six drivers: Regulatory, Financial, Organizational, Technological, Relational, and Cognitive, based on an analysis of how each contributes to the dynamics of sustainable organizational transformation. This made it possible to obtain a clear panorama of the organizational transformation mechanism, highlighting how it operates across each corporate aspect, whether financial, operational, internal, or external.

3.5 Elaboration of the conclusions (step 5)

In Stage 5, the work’s conclusions were drawn, presenting the answer to the research question and demonstrating the achievement of the proposed objective. The theoretical and practical contributions were highlighted, emphasizing the relevance of the proposed drivers in transforming traditional business models into sustainable, ESG-oriented models. Additionally, suggestions were presented for future research to broaden understanding of the mechanisms underpinning organizational transformation and to encourage studies that delve deeper into the practical application of the proposed drivers across different organizational contexts.

4 Development

Throughout the reading and analysis of the 52 articles, 114 Boosting Elements (BE) were identified. These factors encompass initiatives that generate positive sustainability outcomes for organizations. In this analysis, the comparison of definitions, functions, and mechanisms of action revealed partial equivalences among these findings. This led to analytical consolidation, in which new occurrences no longer introduced novel information but instead reiterated variations of previously identified elements. As a result, these contents were merged into 30 elements, which gained greater density and application potential and were coded as BE#01 to BE#30. These elements are conceptually distinct and can concisely and non-redundantly represent the phenomenon under investigation. Figure 3 presents the BEs identified per article.

Driving elements identified per article.
Figure 3. Driving elements identified per article.

In Figure 3, the columns correspond to the articles (numbered 01 through 52), while the rows represent each of the elements (BE). The markings in the cells indicate the presence of a particular element in a specific article. At the end of each row, the total number of articles in which that element was identified is shown, allowing for an overview of its occurrence across the entire sample. Thus, the identified elements were systematized as shown in Table 1.

Table 1. Boosting elements of sustainable organizational transformation.

CodeDescriptionReferences
BE#01 Digital TransformationRefers to the measurement and reporting systems that utilize big data and digital platforms to enhance the transparency and verifiability of information disclosed to stakeholdersAlkaraan et al. (2025), Cui et al. (2025), and Zhang R. et al. (2025)
BE#02 ValueAddresses long-term value creation, linking operational efficiency and the strengthening of strategic relationships to economic sustainabilityBaran et al. (2022) and Li and Gu (2025)
BE#03 ReputationConcerns the strategic management of stakeholders, with a focus on mapping reputational risks and adaptive negotiationBeknazarov et al. (2025).
BE#04 Planninginvolves integrating ESG into organizational strategy, aligning investments and goals with formal planningTan et al. (2024) and Xi and Wang (2024)
BE#05 Engagementemphasizes leadership participation and senior management commitment as prerequisites for the integrated coordination of ESG initiativesZheng et al. (2025) and Zhu and Huang (2023)
BE#06 Purposeencourages a shift in the perception of the company’s role, moving away from short-term profit-driven logic toward the generation of sustainable valueGarnov et al. (2022) and Niu and Wang (2024)
BE#07 Commitmentrefers to compliance with international agreements and political commitments that redefine development trajectories and decarbonization goalsFan et al. (2025) and Komarova et al. (2023)
BE#08 Inclusionencompasses employee empowerment and diversity, promoting inclusion, well-being, and talent retentionShmelev and Gilardi (2025) and Hu et al. (2024)
BE#09 DecarbonizationInvolves the development of clean technologies to reduce exposure to climate risksWan et al. (2025), Mufungizi and Mpaka (2025)
BE#10 KnowledgeEmphasizes organizational improvement and knowledge dissemination through the systematization of training and the exchange of experiencesHsu and Chang (2026) and Nitlarp and Mayakul (2023)
BE#11 MindsetAddresses the reshaping of perceptions of risks and opportunities, broadens understanding of climate and social risks, and identifies new marketsKorankye et al. (2024), Koundouri et al. (2025), and Peloso Vasconcelos et al. (2025)
BE#12 ResponsibilityRefers to the redefinition of governance and fiduciary duties, incorporating socio-environmental responsibilities into corporate legislationJia et al. (2025), Runqi and Ren (2022), and Uzliawati et al. (2023)
BE#13 SubsidiesEncompass the use of public policy instruments and economic incentives, such as subsidies and green credit, which alter the economic calculus of corporate decisionsChen et al. (2025b) and Liang and Zhang (2025)
BE#14 SuppliesConcerns the passing on of indirect regulatory pressure in the value chain, through the transfer of requirements from multinationals to suppliersBabynina et al. (2023), Hsu and Chang (2026), and Liang and Zhang (2025)
BE#15 ResilienceIntegrates ESG into financial risk assessment, considering climate, regulatory, and reputational risks in market valueAo et al. (2025), Babynina et al. (2023), and Cui and Cao (2025)
BE#16 LeverageEmphasizes the promotion of sustainable organizational transformation through institutional investors’ capital allocation criteriaAo et al. (2025), Cui and Cao (2025), and Khan et al. (2024)
BE#17 MonitoringCorresponds to social and media monitoring, where pressure from external stakeholders influences the preservation of trust and legitimacyAfanas’ev and Shash (2022), Li C. et al. (2025), and Salin and Ali (2025)
BE#18 InfrastructureAddresses the development of organizational capabilities, with investment in information governance and internal technical competenciesChung et al. (2023), Sui et al. (2024), and Zhang K. et al. (2025)
BE#19 OversightRefers to regulatory monitoring, in which the possibility of sanctions encourages greater managerial diligenceCui and Cao (2025) and Wang et al. (2024)
BE#20 DifferentiationAddresses strategic decision-making through product and service innovation as a competitive advantageChen (2025a), Wu (2023), and Li Y. et al. (2025)
BE#21 EfficiencyFocuses on innovation in processes and operations, reducing resource consumption and reconfiguring production chainsLee et al. (2025), Long et al. (2026), and Yan et al. (2025)
BE#22 InterdependenceConcerns the structuring of interorganizational governance through codes of conduct extended to the supply chainChen et al. (2025b), Seow (2025), and Wang and Zhang (2025)
BE#23 Mandatory ComplianceRefers to adherence to formal, mandatory ESG disclosure regimesHu et al. (2024) and Vijaya et al. (2026)
BE#24 ComparabilityAddresses clarity in ESG classifications, promoting comparability and signaling through sustainability indicesBurgstaller (2022), Cheng and Zhao (2025), and Hu et al. (2024)
BE#25 TransparencyRefers to combating greenwashing through taxonomies and classification tools that reduce ambiguities and the reporting of false or incomplete information by organizationsBurgstaller (2022), Koundouri et al. (2025), and Vijaya et al. (2026)
BE#26 CredibilityAddresses access to financing and the cost of capital, linking operational stability to lower debt costsCui and Cao (2025) and Hu et al. (2024)
BE#27 LegitimacyAddresses meeting the expectations of civil society and communities, associated with building a social license to operateLi C. et al. (2025), Salin and Ali (2025), and Yan et al. (2025)
BE#28 FormalizationAddresses the establishment of a decision-making structure and governance design, including an ESG committee and formal performance indicatorsLi X. et al. (2025), Jia et al. (2025), and Runqi and Ren (2022)
BE#29 DialogRefers to relationships with investors and creditors, emphasizing dialog and reducing information asymmetryKoundouri et al. (2025), Peloso Vasconcelos et al. (2025), and Salin and Ali (2025)
BE#30 CultureRefers to the internalization of ESG as a decision-making framework, integrating it into existing mental models and corporate identity, thereby consolidating its structural integration within organizational cultureHsu and Chang (2026) and Phuong et al. (2025)

5 Proposition and discussion of ESG drivers for sustainable organizational transformation

ESG-driven organizational transformation is shaped by recurring elements that act in concert through distinct yet interrelated drivers. These elements were identified in the analyzed literature across multiple contexts, including economic sectors, geographic regions, and methodological approaches, indicating a high degree of complexity in how ESG drives corporate change. Conceptual affinities were identified among the driving elements, such as external pressure, economic incentives, relational dynamics, leadership style, technological innovation, or mindset shifts, based on the nature of their influence mechanisms. The criterion for grouping was the specific role each driver played in the dynamics of sustainable organizational transformation. This stems from an inductive categorization process based on empirical recurrence, functional distinctions, consistency among identified mechanisms, and analytical rigor. To avoid conceptual overlaps, six primary drivers are proposed: Regulatory, Financial, Relational, Organizational, Technological, and Cognitive (Figure 4).

ESG drivers and their boosting elements.
Figure 4. ESG drivers and their boosting elements.

Thus, the six proposed drivers operate in a coordinated manner, forming an integrated whole, in which the first two establish the conditions of legitimacy and economic incentive, the Relational driver stabilizes the transformation in the interorganizational sphere, the next two process and operationalize these pressures within organizations, and the Cognitive driver underpins their long-term strategic internalization. In addition, each proposed driver was grounded in the relevant literature, integrating and linking converging perspectives.

5.1 Regulatory driver

External pressure stemming from regulatory obligations establishes the minimum structural baseline for organizational transformation (Koundouri et al., 2025; Hsu and Chang, 2026; Runqi and Ren, 2022). In many cases, compliance is the primary reason a company publicly discloses its ESG-related policies, processes, and impacts (Beknazarov et al., 2025; Jia et al., 2025; Vijaya et al., 2026). Rather than adopting a purely reactive compliance posture, organizations are recommended to leverage regulatory frameworks as strategic levers to redefine governance.

To achieve this, organizations should proactively develop data collection and audit systems ahead of legally mandated ESG reporting. Moving beyond mandatory compliance (BE#23), they should design their systems to influence organizational decision-making, with well-defined responsibilities, independent audits, and accountability connected to senior leadership. Strategically, these requirements can be transformed into opportunities to enhance transparency and combat greenwashing, where companies overstate their ESG performance through selective data disclosure. Addressing greenwashing should be an integral part of the regulatory approach. Additionally, implementing classification tools like taxonomies (BE#25) can help define what qualifies as sustainable activity, safeguarding investors and guiding capital toward genuinely sustainable initiatives (Burgstaller, 2022; Koundouri et al., 2025).

The establishment of environmental courts and the strengthening of enforcement mechanisms, to a certain extent, improve companies’ ESG performance, primarily due to the ability of penalties (such as fines or other sanctions) to deter violations or crimes (Cui and Cao, 2025; Wang et al., 2024). Organizations should leverage their managerial diligence to improve access to bank credit and reinforce the connection between regulatory compliance and financial health (BE#19). Additionally, they should integrate targets from international agreements like the Paris Agreement into their planning processes to support decarbonization and reduce climate risks (BE#07). These agreements increase the risk associated with high-carbon business models (Huang et al., 2022; Komarova et al., 2023). Therefore, companies should use them as a basis for guiding planning, investments in clean technologies, and product portfolios.

Regarding the regulatory driver, organizations should clearly assign social and environmental responsibilities to CEOs and boards, encouraging them to actively incorporate ESG factors into decision-making and investment strategies (BE#12). This strategy reshapes corporate governance by blending fiduciary duties, traditionally focused on maximizing investor returns, with explicit consideration of ESG issues, aligning with emerging regulatory expectations already in place in some areas. Additionally, organizations are encouraged to utilize public policy tools and economic incentives, such as subsidies, tax advantages, and green credit schemes (BE#13).

These tools modify companies’ economic assessments, making sustainable investments more appealing and fostering the integration of ESG factors into corporate frameworks (Chen et al., 2025b; Liang and Zhang, 2025). Organizations that align their initiatives with these public incentives can lower transition costs, secure new funding, and position themselves as leaders in decarbonizing industries. It is also advisable to expand ESG requirements to suppliers, generating ripple effects that promote broader organizational change beyond the core company (BE#14). This indirect regulatory influence from global value chains presents an opportunity for large firms to enhance governance throughout their supply networks and for smaller firms to join more sustainable supply chains, gaining access to more demanding markets. Essentially, by adjusting incentives, risks, and legitimacy standards within sustainability and consistency strategies, the Regulatory driver creates the fundamental conditions necessary for organizational change driven by ESG principles.

5.2 Financial driver

ESG performance influences risk assessment, the cost of capital, and allocation decisions by institutional investors (Alkaraan et al., 2022; Baran et al., 2022; Hsu and Chang, 2026). Therefore, it is suggested that organizations use the financial driver as the main way to incorporate ESG into their economic mindset, utilizing financial incentives, borrowing limits, and adjusted risk–return expectations.

To capitalize on gains in credibility (BE#26), companies are advised to use the ESG agenda as a liability-management tool. This involves proactively reporting governance metrics to reduce perceived market risk and, consequently, secure more competitive interest rates on new funding. Companies should adopt ESG practices with well-defined parameters for internal and external stakeholders, as this signals operational stability and managerial responsibility to the financial market. Given the leverage held by institutional investors (BE#16), organizations must align their corporate transparency with these investors’ specific capital allocation criteria. The focus here should be on strengthening decision-making mechanisms that directly respond to the financial market’s demands for ESG compliance. Companies should harness the pressure from these investors to enhance governance, decision-making, and transparency. Additionally, it is advisable to incorporate financial risk assessment into the operational plan, especially concerning climate, regulatory, and reputational risks, like extreme weather, sudden regulatory shifts, and socio-environmental scandals. Such risks can directly impact market value, heightening cash flow volatility and uncertainty (Ao et al., 2025; Khan et al., 2024). Therefore, using ESG metrics is recommended as a tool to mitigate risks and inform investment decisions, effectively embedding ESG considerations into organizational planning to bolster financial resilience.

Value creation (BE#02) must be translated from theory into the business model by reducing contingent liabilities and future losses. By integrating ESG into its planning framework, the organization shifts from viewing it as a cost to using it as a metric for long-term economic sustainability and operational efficiency. For organizations, integrating ESG into business models is essential as a means of boosting efficiency and creating value, positioning it as a component of economic sustainability rather than an extra cost. Moreover, the demands from capital markets for transparency, standardization, and comparability of ESG data must be incorporated into corporate strategies to attract investors (BE#24). Companies should work to improve the identification and comparability of ESG information to meet financial market expectations; this will also support better information governance, enhance internal controls, and improve ESG data auditing, thereby increasing credibility. In regions with higher institutional instability, such as many emerging markets, adopting practices aligned with global standards for securing external funding is highly recommended, as access to international financing increasingly depends on a positive ESG evaluation (Babynina et al., 2023; Beknazarov et al., 2025; Giupponi et al., 2025).

The financial driver functions as a catalyst for institutional convergence, encouraging companies to adopt more sustainable practices even without strict domestic laws (Ma et al., 2025). It works alongside the Regulatory driver, as policies on green credit, financial incentives, and disclosure reinforce capital market signals that expect higher corporate commitment. This creates an environment where neglecting ESG practices results in credit access difficulties. In the business model, the financial driver directly influences investment strategies, capital allocation, and cost structures by framing ESG as a measurable and strategic economic factor.

5.3 Relational driver

The Relational Driver is identified as a key component of sustainable, ESG-focused organizational change, functioning through interactions with both internal and external stakeholders. Because these stakeholders can impact the company’s reputation and legitimacy, their expectations should influence corporate decision-making, operations, and governance frameworks (Zhang S. et al., 2025; Li X. et al., 2025; Afanas’ev and Shash, 2022). For organizations, viewing this driver as a strategic element helps foster more credible relationships, reduce risks, and ensure that social and environmental initiatives meet stakeholder expectations.

Therefore, organizations should integrate mechanisms into their strategies to address pressure from external stakeholders such as customers, local communities, nongovernmental organizations, and media (BE#17). They ought to adopt clear ESG practices and promote them widely to build legitimacy and trust, which enhances stakeholders’ capacity to influence organizational behavior positively, especially regarding environmental and social concerns. This relational pressure is especially significant in sectors with high negative socio-environmental impacts, like oil extraction, textile, and food processing (Afanas’ev and Shash, 2022). In these industries, the risk of increased costs, operational delays, and reputational harm from opposition by local communities or civil society campaigns can motivate organizations to implement changes to mitigate these risks (Salin and Ali, 2025; Li C. et al., 2025). Therefore, consistent engagement with external stakeholders is essential to position organizations as trustworthy and responsible, reducing reputational vulnerabilities.

Organizations are advised to foster ongoing dialog about their ESG information with their investors and creditors, as key stakeholders, thereby increasing the transparency of their reporting, reducing information asymmetries, and improving their financial relationships (BE#29). Companies should establish and maintain structured communication channels for their ESG initiatives, such as databases of relevant corporate reports (e.g., reports endorsed by the GRI, SASB, etc.), to expand their access to financial resources and reduce the volatility associated with negative events. Unlike the systemic market mechanism described in the Financial driver (see BE#26), whose ratings and indices serve as structural mechanisms for pricing and signaling financial market demands, the focus here is on the quality of engagement and constructive dialog with investors, which can be systematized as part of capital governance.

Stakeholder demands must be extended throughout the supply chain, encompassing the management of guidelines and interorganizational governance, since the ripple effects of transferring social, environmental, and governance demands from large companies, especially multinationals, to suppliers and business partners broaden the scope of organizational transformation (BE#22). This process should be used as one of the main mechanisms for disseminating ESG, particularly in contexts where direct regulation is limited to large corporations. Large companies are encouraged to adopt codes of conduct, social and environmental audits, and ESG-based supplier selection criteria as tools to strengthen their value chains and support smaller companies in adapting their practices to maintain business relationships.

Another vital aspect of sustainable organizational transformation involves managing the expectations of civil society and local communities, especially concerning positive social impacts and minimizing negative ones. Organizations are advised to incorporate stakeholder demands related to social responsibility, inclusion, workplace safety, and human rights into their decision-making processes, particularly in sectors with large workforces or reliance on natural resources (BE#27). Meeting these expectations can foster long-term community relationships, reduce conflicts, and strengthen their “social license” to operate. Furthermore, companies should identify reputational risks and actively involve stakeholders in negotiations to better avoid conflicts and address emerging concerns. This approach promotes ongoing dialog, organizational adaptation, and risk mitigation—helping to prevent stakeholder relationship breakdowns that could lead to boycotts, sanctions, contract losses, or market devaluation.

The Relational driver impacts supply chain management, engagement strategies, and social legitimacy, which supports operational continuity. It indicates that organizations should acknowledge the link between socio-environmental performance and the strength of their relationships with key stakeholders as their ESG performance advances.

5.4 Organizational driver

The Organizational Driver impacts the internal processes that facilitate and strengthen a company’s response to external pressures. An organization’s capacity to interpret and implement ESG-related demands into strategic decisions, formal structures, and consistent operational routines defines the extent and effectiveness of its sustainable transformation (Chen et al., 2025b; Hu et al., 2024; Runqi and Ren, 2022).

In this area, organizations must ensure the active involvement of leadership as a prerequisite for genuinely integrating ESG into organizational practices, particularly at the board of directors and executive management levels (BE#05). Companies are advised to develop leaders with specific expertise in sustainability and socio-environmental risk management to facilitate organizational transformation and to build more diverse, qualified boards that incorporate ESG more systematically into decision-making, thereby reducing conflicts between financial and socio-environmental objectives. In line with these recommendations, organizations are encouraged to establish an ESG committee with clearly defined responsibilities and to incorporate ESG indicators into performance evaluation systems to strengthen organizational capacity to implement structural changes and improve decision-making and corporate governance (BE#28). Governance should serve as a mechanism for identifying, processing, prioritizing, and translating regulatory and financial demands into action plans.

In countries lacking legislation on ESG obligations, companies should explicitly embed environmental and social responsibilities into managers’ roles to strengthen internal controls and bridge the gap between corporate planning and sustainability. Additionally, they should factor the costs of meeting ESG standards into their capital costs, redefining fiduciary duties to include investing in ESG improvements alongside financial returns. It is also recommended that companies set clear goals and allocate resources to ensure a steady sustainable transformation of the organization (BE#04). Companies that treat ESG as a structural guide for their transformation align investments, innovation, and business models with long-term sustainability objectives (Komarova et al., 2023; Tan et al., 2024; Xi and Wang, 2024). This integration reduces fragmentation in ESG initiatives, avoids ad hoc or departmentalized approaches, and further supports the definition of clear, more coherent objectives in environmental policies, social practices, and governance mechanisms, contributing to efficiency gains and risk reduction.

The effective adoption of ESG requires investments in organizational infrastructure capable of collecting, processing, and reporting reliable data (Mufungizi and Mpaka, 2025; Sui et al., 2024). To this end, organizations are advised to establish internal ESG measurement and control systems as a prerequisite for meeting potential regulatory requirements and capital market expectations, thereby enhancing information governance (BE#18). It is also advisable for companies to internalize ESG principles through employee training and by promoting a sustainability-oriented organizational culture. Companies that invest in training and developing competencies related to socio-environmental issues demonstrate a greater ability to implement ESG practices consistently over time (Nitlarp and Mayakul, 2023; Zhang K. et al., 2025). This process helps reduce internal resistance and align different hierarchical levels around organizational objectives.

Finally, regarding the Organizational driver, companies are advised to create inclusive environments starting with the employee hiring process, by identifying talent and fostering technical development and professional growth regardless of gender, ethnic background, beliefs, religion, age, or any other circumstance (BE#08). To this end, companies should establish committees to address challenges and opportunities and implement Diversity, Equity, and Inclusion (DEI) strategies that promote the appreciation of human diversity, equal opportunities, accessibility, and the full participation of individuals with different sociodemographic and identity profiles. Additionally, they must invest in ongoing employee assessments, close performance gaps, create succession plans for critical roles, and prioritize talent retention by considering skill profiles and leadership styles when assembling teams. The Organizational driver emphasizes governance, strategic, tactical, and operational planning, along with organizational culture. It promotes structural changes in routines and responsibilities that support ESG initiatives and foster long-term transformation.

5.5 Technological driver

The Technological driver involves the technical and operational resources needed for successfully implementing environmental, social, and governance initiatives. Technology and innovation serve as catalysts for change by lowering technical obstacles, boosting efficiency, and enabling new business models aligned with sustainability (Alkaraan et al., 2022; Zhang K. et al., 2025). Organizations are encouraged to develop and adopt clean, low-carbon technologies through investments in renewable energy, energy-efficient solutions, and emissions reduction methods (BE#09). Using these technologies helps companies mitigate climate and regulatory risks and aligns their operations with national and global decarbonization targets (Chung et al., 2023; Mufungizi and Mpaka, 2025; Shmelev and Gilardi, 2025).

Companies should enhance operational efficiency by innovating production methods to lower the use of natural resources, waste, and costs (BE#21). These improvements support the economic sustainability of top ESG practices, especially in resource-intensive sectors (natural, energy, financial, or human) and help reduce risks (Lee et al., 2025; Fan et al., 2025; Wang and Zhang, 2025). Additionally, companies are encouraged to implement process innovations in designing production chains, including incorporating ESG considerations into product design, logistics, and supply chain management. It is also advisable for firms to use digital systems for ESG measurement, monitoring, and reporting, with the necessary technical infrastructure to collect and analyze environmental and social data, which can decrease information gaps and enhance corporate governance (BE#01). In this sense, digitalization offers a cost-effective path to environmental progress, enabling firms to leverage digital tools for emissions management and green innovation without requiring massive upfront investments (Ao et al., 2025). Industry 4.0 technologies, such as the Internet of Things (IoT), cloud computing, and Artificial Intelligence (AI), are seen as enablers of the transition to a circular economy, optimizing the recycling and reuse of materials (Alkaraan et al., 2022). With the Industry 4.0 movement, adopting technologies like digital platforms, big data, and traceability tools is crucial to satisfy increasing demands from regulators and investors for transparent and comparable information (Alkaraan et al., 2022; Nitlarp and Mayakul, 2023; Vijaya et al., 2026). This approach also helps mitigate greenwashing by making the disclosed data more verifiable (Burgstaller, 2022).

Therefore, companies are advised to automate their measurement systems to ensure greater consistency between operations and sustainability reports, which can enhance their credibility with capital markets and investors. The Organizational driver focuses on the company’s capacity to manage data (see BE#18), while the Technological driver pertains to the tools that enable effective governance. In markets lacking specific regulations, organizations should leverage sustainable innovation as a strategy for regulatory foresight, proactively preparing for future legal standards and gaining a competitive edge (BE#20). This approach helps lower adjustment costs and bolsters organizational resilience amidst institutional changes (Peloso Peloso Vasconcelos et al., 2025; Niu and Wang, 2024; Wu, 2023). It also functions as a strategic approach in already regulated markets. Here, technology and innovation should work in tandem with other transformation mechanisms to support companies in creating value and achieving sustainable organizational change.

5.6 Cognitive driver

Organizations should view the Cognitive driver as a key element of ESG-driven sustainable transformation (see Figure 4), emphasizing how managers interpret risks, opportunities, and responsibilities. It is recommended that companies directly engage with organizational perspectives, rationales, and values, anchoring them in ESG principles to consistently steer decision-making. To achieve this, organizations are encouraged to actively reframe their societal role to create long-term environmental, social, and economic value, moving beyond the traditional view of the company as solely profit-driven (BE#06). This shift in organizational perspective is often influenced by public debates, socio-environmental crises, and increasing awareness of corporate impacts (Chen et al., 2025b; Chung et al., 2023). Particularly, in contexts where these issues are prominent, managers should explicitly embed ESG into organizational responsibility and leverage this cognitive evolution as a basis for structural change.

To bring about this shift in mindset, managers are advised to broaden their understanding of risks and opportunities by incorporating climate, regulatory, social, and reputational factors, which have historically been underestimated, into investment decisions, growth planning, and business models (BE#11). As a result, ESG also strengthens its position as a source of opportunities, particularly in innovation, market access, and long-term competitiveness (Peloso Vasconcelos et al., 2025; Koundouri et al., 2025). It is advisable to incorporate ESG pillars into decision-making logic so they guide the daily choices of top organizational leadership, favor forward-looking and integrated approaches, and are followed even in the absence of immediate regulatory pressures (BE#30). This cognitive internalization is associated with greater consistency between discourse and practice, reducing the incidence of behaviors that are at odds with statements; that is, decisions made are automatically grounded in ESG through instinctive principles (Phuong et al., 2025). Organizations in which ESG is perceived as an integral part of corporate identity tend to demonstrate greater consistency in implementing environmental and social policies (Hsu and Chang, 2026).

Finally, to facilitate this cognitive shift, it is recommended that organizations invest in training, promote the exchange of experiences (knowledge sharing), intensify stakeholder engagement, and adopt continuous adaptation practices to systematically integrate and disseminate ESG principles across their policies, processes, and operations (BE#10). This internalization helps reinforce an ESG-oriented mindset, reduce internal resistance, and align different hierarchical levels, since sustainable transformation depends on organizations’ ability to learn from internal and external experiences, absorb new knowledge, and disseminate shared understandings of sustainability (Nitlarp and Mayakul, 2023; Hsu and Chang, 2026). Companies that promote systematic learning processes tend to demonstrate greater maturity in ESG adoption and a greater capacity to respond to emerging demands (Phuong et al., 2025; Hsu and Chang, 2026). Thus, it is recommended that organizational learning be treated as a bridge between the cognitive dimension and the operational capabilities necessary for sustainable transformation.

The Cognitive driver acts as a foundational interpretive basis for all other drivers. Without a mindset shift, the effectiveness of other transformation mechanisms is restricted. This driver enhances sustainable organizational change by aligning interpretations, values, and rationales with ESG principles, thus completing the set of proposed drivers.

5.7 Coordination of drivers for organizational transformation

Sustainable organizational transformation is a long-term process, and the benefits and financial results generally do not materialize immediately (Beknazarov et al., 2025; Fan et al., 2025). This transition requires companies to adopt a strategic vision that prioritizes investment sustainability and the creation of lasting value over high short-term profit margins (Afanas’ev and Shash, 2022; Beknazarov et al., 2025). ESG-driven organizational transformation, as evidenced by the results, arises from the interaction among the six proposed drivers. Sustainable organizational transformation occurs through a coordinated process in which External Pressures (Regulatory and Financial drivers) establish new legitimacy criteria and economic incentives that challenge the traditional model. Once internalized, these pressures are processed by the execution core, composed of the Organizational and Technological drivers, which reconfigure internal structures and innovation systems, and the Relational driver, which validates these changes within the value chain. This entire cycle is sustained by the Strategic Support provided by the Cognitive driver, which operates across the board to ensure that the shift in mindset and culture transforms the process into a continuous cycle of learning and adaptation, as illustrated in Figure 5.

Interconnection of the drivers.
Figure 5. Interconnection of the drivers.

This framework reveals that the drivers operate as a sequential, feedback-driven process in which pressures originate outside the organization, are internalized, and enabled by organizational, technological, and relational capabilities, while the cognitive component ensures continuity and consistency in responding to external pressures (Figure 5). The Regulatory and Financial drivers shape the operating environment for companies by redefining regulatory boundaries, legitimacy criteria, and economic incentives that shape the business model. The Relational driver consolidates sustainable organizational transformation by anchoring it to value chain governance and legitimacy in the eyes of stakeholders. The Organizational and Technological drivers translate these pressures into internal reconfiguration, affecting decision-making architecture, control systems, production processes, and the development of sustainable solutions. In turn, the Cognitive driver plays a cross-cutting role, influencing the analytical interpretation that guides the intensity, consistency, and continuity of the changes implemented.

These relationships indicate that no single driver is self-sufficient; its effectiveness depends on the simultaneous activation of other drivers. In summary, there is a logic whereby internalizing the purpose of sustainability fosters compliance in response to external pressure; technical capacity, when properly directed, drives the integration of results; and technology, with well-defined governance, fosters consistency in decision-making and genuine cognitive change, thereby strengthening the entire system. Therefore, organizational transformation results from the dynamic interplay between these drivers, rather than the isolated action of each one. In addition to this logical sequence, the model highlights fundamental dynamic interdependencies: Regulatory pressure acts as a direct catalyst for the Financial driver, signaling that legal compliance redefines investors’ risk and return parameters. Simultaneously, a critical bidirectional relationship is observed between the execution core and strategic support; while the Cognitive driver guides the initial change, the new routines of the Organizational driver provide feedback and consolidate the culture of sustainability. Finally, the model reveals that Sustainable Organizational Transformation is not a static state, but a process that closes the systemic cycle by feeding back into the external environment, allowing transformed companies to actively influence the regulatory pressures within their own sector.

The six drivers proposed here serve as antecedents that redefine the traditional logic of value creation, capture, and delivery emphasized in the literature on business models (Bocken et al., 2014; Nascimento et al., 2024). For example, the financial driver (BE#02 Value) redefines value capture by reassessing risk and the cost of capital, while the technological driver (BE#21 Efficiency) reconfigures value delivery through process innovation. However, a comprehensive mapping between the proposed drivers and the dimensions of value creation, capture, and delivery was beyond the scope of this study and is suggested as a future line of research. Although the Theoretical Background situates this study within the Triple Bottom Line (TBL) tradition, which conceptualizes sustainability along environmental, social, and economic dimensions, the drivers proposed here were structured according to the ESG pillars and their underlying mechanisms of influence, rather than by a strict TBL classification. This choice reflects an empirical finding from the analyzed literature: most Boosting Elements operate simultaneously across more than one TBL dimension, so that a dimension-based classification would fragment mechanisms that the literature treats as indissociable. For instance, the Financial driver generates economic outcomes (e.g., a lower cost of capital, BE#26 Credibility) while at the same time enabling environmental investment, and the Regulatory driver encompasses environmental commitments (BE#09 Decarbonization) as well as social requirements transmitted along the supply chain (BE#14 Supplies). The ESG-based classification therefore preserves the multidimensionality of each mechanism while remaining compatible with and complementary to the TBL perspective introduced in Section 2.

To operationalize each of these drivers, the questions in the illustrative excerpt from Table 2 (the complete version of which is included in Supplementary Table S2) can be used to diagnose the organization’s current sustainability status against ESG criteria. This tool is a heuristic summary derived directly from the recommendations already presented in Section 5, and it is suggested that its validation with managers and experts be carried out as a future task.

Table 2. Diagnostic tool for ESG-driven organizational transformation.

DriverBEDiagnostic questionPriority action
RegulatoryBE#23 Mandatory ComplianceDoes the organization anticipate mandatory ESG reporting requirements before they become legally binding?Structure compliance systems with defined responsibilities and independent audits
FinancialBE#26 CredibilityAre ESG metrics used to negotiate lower financing costs?Report governance metrics proactively to reduce perceived market risk
RelationalBE#17 MonitoringDoes the organization systematically track external stakeholder/media pressure on ESG issues?Publicize well-structured ESG practices to build legitimacy and trust
OrganizationalBE#05 EngagementIs senior leadership actively and demonstrably involved in ESG integration?Develop leaders with sustainability and socio-environmental risk expertise
TechnologicalBE#09 Decarboniza-tionDoes the organization invest in clean/low-carbon technologies?Prioritize clean technology investment to reduce climate/regulatory risk
CognitiveBE#06 PurposeHas the organization moved beyond a purely profit-driven self-conception?Reframe organizational purpose around long-term shared value

Finally, it is recommended that organizations seeking to make this transition in their business model prioritize the Regulatory and Financial drivers, given their potential positive and negative consequences. Next, it is recommended to proceed with the Cognitive driver, as it will support the development of the other drivers. For companies that have already begun this transition, it is recommended that they assess their progress on each driver so that their efforts and resources are directed where they are most needed, promoting balance among the drivers and enabling greater success in the organization’s sustainable transformation.

6 Conclusion

Sustainability has become a “filtering mechanism,” in which the creation of long-term shared value, integrating the company’s financial health with the well-being of the planet and society, is valued more highly than short-term profit maximization. This indicates that sustainable organizational transformation is a strategic necessity for the survival and competitiveness of companies in today’s landscape, as well as an ethical choice. This multifaceted transformation allows organizations to differentiate themselves in an increasingly conscious market that attracts consumers and talent, creating a barrier to imitation that competitors find difficult to overcome. Although external pressures demand swift responses, a profound shift in business models is a systemic evolution that takes time to internalize new values and technologies. This work sought to answer the research question of how ESG can be promoted within organizations, with a view toward transitioning to sustainable models.

The results of this work indicate that ESG-driven organizational transformation stems from the dynamic interplay among institutional coercion, economic incentives, internal capabilities, technological innovation, relational legitimacy, and cognitive reconfiguration. Regulatory and market pressures alter risk and return calculations; internal governance structures determine responsiveness; technology enables operationalization; stakeholders redefine legitimacy criteria; and a shift in mindset supports the internalization of ESG as a decision-making framework. The key point is that leadership serves as a critical mediator between external stimuli and organizational responses, translating the demands of multiple stakeholders into integrated, coordinated strategic decisions. When these drivers operate in alignment, ESG ceases to be treated as a compliance mechanism and begins to guide decision-making, including market expansion, product innovation, and supply chain reconfiguration. By proposing these drivers within a coherent analytical framework, this work fills the research gap, answers the research question, and achieves its objective by demonstrating how interactions among different layers of influence conditions enable and sustain the reconfiguration of the business model.

6.1 Theoretical contributions

The theoretical contribution of this work lies in advancing the state of the art regarding ESG as a driver of organizational sustainability by proposing a set of drivers that goes beyond approaches focused solely on individual ESG pillars or types of pressure, structuring these driving elements, and integrating them into a cohesive system. This breaks with reductionist approaches that treat regulation, finance, governance, and organizational culture as separate entities. This proposition shifts the debate from the adoption of ESG practices to the engineering of ESG-driven organizational transformation, offering a conceptual framework that reframes ESG as a driving force for sustainability within traditional business models. The proposed set of drivers differs from classical institutional approaches by not restricting organizational transformation to coercive, normative, or mimetic pressures, the kind that leads organizations to adopt ESG practices by imitating peers or competitors in the sector, nor by treating it as a predominantly reactive response to the pursuit of legitimacy. While acknowledging the importance of these dynamics, this perspective broadens the scope of ESG knowledge by integrating economic, organizational, technological, relational, and cognitive mechanisms into a coherent analytical framework that links causal levels and functions in a cumulative manner. Furthermore, this work takes on an explanatory character by revealing how interactions among drivers’ conditions enable and sustain the transition from the traditional business model to a sustainable one.

This distinction becomes clear when compared to the terminology used in the studies analyzed in the Introduction. Previous studies have addressed the following as largely independent explanatory factors: technological advancement, administrative structure, human commitment, investor perceptions, and macroeconomic and state-level pressures. However, this work integrates these elements, previously isolated into the Technological, Organizational, Financial, and Regulatory drivers, respectively, while also identifying two additional mechanisms (Relational and Cognitive) that these single-driver studies do not mention as autonomous drivers, even though their underlying elements (e.g., stakeholder engagement, mindset shifts) appear scattered throughout their conclusions. Thus, the present framework advances the theory by offering a distinct and specific nomenclature for each mechanism, as well as an explicit model of how these mechanisms interrelate (Section 5.7), rather than a single, umbrella term for organizational change.

6.2 Practical contributions

As practical contributions, the drivers outlined in this work provide a decision-making framework that enables organizations to diagnose weaknesses, prioritize interventions, and align planning, infrastructure, and culture by identifying which factors are present in their context and what role each driver plays in the dynamics of organizational transformation. This work inaugurates an analytical framework capable of guiding executive decisions with greater consistency by distinguishing between mechanisms that shape the operating environment (regulatory and financial), capabilities that enable the organizational response (organizational and technological), dynamics that consolidate legitimacy in the field (relational), and foundations that underpin long-term organizational orientation (cognitive). This enables a systemic diagnosis, prioritizing investments and aligning external incentives, internal structure, and systemic vision, thereby increasing the consistency and effectiveness of organizational transformation. Additionally, the recommendations already presented for each driver were synthesized into a summary table (see the complete version in Supplementary Table S2), with one objective diagnostic question per driver, something a manager can effectively use to assess their organization.

The implications also extend to policymakers and institutional investors. For regulators, this work shows that regulatory instruments alone tend to have a limited effect when not linked to consistent economic incentives and governance mechanisms that ensure their internalization within organizations. Regulatory effectiveness, therefore, depends on the coherence among institutional design, economic policy instruments, and transparency requirements that influence organizational decisions. For investors, the proposed drivers provide a framework for assessing the ESG maturity of organizations more systematically, distinguishing superficial company disclosures from sustained transformations achieved through internal restructuring and cognitive change. This functional interpretation of the drivers enables more refined analyses of risk, resilience, and long-term value creation.

6.3 Future research

As a future agenda, we suggest: testing the set of proposed drivers through studies that assess their intensity and interaction across different sectors and institutional contexts, for example, that use quantitative methods, such as Structural Equation Modeling (SEM), to measure the strength of each driver’s influence and the correlations shown by the arrows in Figure 5; mapping longitudinal analyses that allow us to understand how the interplay between drivers evolves over time to determine whether the dynamics among drivers change depending on the economic environment; developing new ways to assess the degree of ESG-driven transformational maturity, going beyond traditional disclosure indicators to capture actual changes in operational processes and organizational culture; deepening research on the influence of cognitive change on the achievement of organizational and sustainable outcomes; conducting comparative studies between developed and emerging economies to investigate whether changes in the economic landscape alter the interplay and dynamics among the drivers; test whether organizations that have reached an advanced level of Sustainable Organizational Transformation actually begin to influence and shape the external pressures (regulatory and financial) in their sectors, as suggested by the circular flow of the model; a dimension-based (environmental / social / economic) classification of the drivers and Boosting Elements, potentially supported by expert validation or quantitative methods, is suggested as a promising avenue for future research; and conducting in-depth case studies of organizations that have undergone this transition, to empirically validate the sequence, timing, and interaction of the proposed drivers in real organizational settings.

Generative AI statement

The author(s) declared that Generative AI was used in the creation of this manuscript. The AI software NotebookLM was used in this work to identify the primary boosting elements. However, all information and content in this work were thoroughly verified and reviewed by the authors.

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Supplementary material

The Supplementary material for this article can be found online at: https://www.frontiersin.org/articles/10.3389/frsus.2026.1871060/full#supplementary-material

Supplementary material Supplementary material at the source

Supplementary material Supplementary material at the source

Footnotes

Edited by: Sadia Samar Ali, King Abdulaziz University, Saudi Arabia

Reviewed by: Leandro da Silva Nascimento, Universidade Federal de Sao Paulo, Brazil

Ferda Alper Ay, Cumhuriyet University, Türkiye

James Strode, Ohio University, United States

Statements

Conflict of interest

The author(s) declared that this work was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Funding

The author(s) declared that financial support was received for this work and/or its publication. This work was supported by Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP) grant numbers 2023/16971–7 and 2025/17179–0, by Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq) [408298/2025–1] and by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES) [001].

Author contributions

EG: Conceptualization, Data curation, Formal analysis, Investigation, Project administration, Validation, Writing – original draft, Writing – review & editing. CP: Conceptualization, Formal analysis, Writing – original draft, Writing – review & editing. AM: Formal analysis, Methodology, Writing – original draft, Writing – review & editing. OO: Supervision, Writing – review & editing.

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Citation

Giupponi, E. C. B., et al. (2026). From traditional to sustainable business models: an organizational transformation driven by ESG. Frontiers in Sustainability, Volume 7. https://doi.org/
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7 - 2026

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Copyright © 2026 Giupponi, Poltronieri, Maia and Oliveira.

License: https://creativecommons.org/licenses/by/4.0/

*Correspondence: Otávio José de Oliveira

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