The Impact of ESG Management Activities on the Organizational Performance of Manufacturing Companies in South Korea: The Moderating Effect of Job Position

Abstract

This study aims to examine the impact of ESG management activities (independent variable) on organizational trust and organizational commitment (mediating variables), as well as organizational performance (dependent variable), among members of large manufacturing enterprises. Additionally, it investigates the moderating effect of job position on the relationship between ESG management activities and organizational performance. For the empirical analysis of this study, data were collected from 561 employees of three large manufacturing companies—Company L, Company H, and another Company H—all of which have implemented and are practicing ESG management. The data were analyzed using SPSS 29.0 and structural equation modeling (SEM: AMOS 29.0). The key findings from the empirical analysis are as follows: First of all, all three ESG factors—environmental (E), social (S), and governance (G)—had a positive effect on organizational trust. The environmental and governance factors had a positive effect on organizational commitment. However, the social factor exhibited a negative effect on organizational commitment. The environmental factor showed a negative effect on organizational performance. By contrast, the social and governance factors had a positive effect on organizational performance. Organizational trust was found to enhance organizational commitment significantly, confirming that employees who trust their organization are more likely to be committed to it. Fifth, a strong sense of trust in the organization was shown to contribute positively to organizational performance and competitiveness. Organizational commitment positively impacted organizational performance, reinforcing the idea that highly committed employees contribute to better outcomes. Finally, this study confirmed that job position moderated the relationship between ESG management activities and organizational performance, indicating that employees at different hierarchical levels perceive ESG management’s impact differently. This study expands the research scope of ESG management beyond marketing, HR, and service industries to focus on employees in large manufacturing enterprises. This provides new insights into how ESG initiatives influence internal organizational dynamics. This study is meaningful in that it provides a foundation for expanding future research into the field of finance or other areas of the manufacturing industry. From a practical standpoint, the findings highlight the necessity of strategic initiatives to ensure that employees fully understand and engage with ESG-related policies. To successfully implement ESG management, organizations must develop effective communication and integration strategies that foster employees’ recognition of ESG initiatives.

1. Introduction

As ESG (environmental, social, and governance) management becomes essential to corporate strategy, governments worldwide are actively implementing policies to support its adoption. In the European Union (EU), the Net Zero Industry Act was recently enacted to help European industries achieve carbon neutrality by 2050 while enhancing global competitiveness. Meanwhile, in the United States, the Securities and Exchange Commission (SEC) introduced a mandatory climate-related disclosure rule in March 2024, requiring publicly traded companies to report climate risks and greenhouse gas emissions. The regulation will be gradually enforced starting in 2026, depending on company size. Similarly, other countries—including the United Kingdom, Australia, Japan, Singapore, and China—are expected to introduce mandatory ESG disclosure requirements [1].

South Korea is also moving toward institutionalizing ESG disclosure based on corporate scale while integrating ESG principles into business practices and corporate culture [2]. Despite these regulatory advancements, South Korean firms have faced criticism for treating ESG management primarily as a risk-mitigation tool rather than embracing it as a fundamental policy transformation. However, as ESG principles become more deeply embedded, businesses are experiencing growing pressure from stakeholders and society to improve their ESG performance and proactively tackle sustainability challenges [3].

To successfully implement ESG initiatives, developing a clear understanding of how ESG activities influence business performance is essential. Numerous studies have highlighted a positive correlation between ESG engagement and corporate performance [4,5]. However, in South Korea, research on ESG management has mainly been qualitative, relying on literature reviews rather than empirical analysis [6,7,8]. ESG management signifies a fundamental shift in corporate values and business perspectives, shaping strategic decisions, corporate culture, and operational principles [9].

As value-based management is crucial for sustainable business practices, ESG management should also be deeply embedded in corporate strategies and core values [10]. While awareness of this necessity is increasing, empirical research remains insufficient [11]. In South Korea, existing studies have primarily focused on the relationship between ESG management and financial performance [12]. By contrast, research on non-financial performance has mainly been confined to marketing, human resources, and service industries [13,14]. However, South Korea is widely recognized as a manufacturing-driven economy, with the sector contributing 28% of the country’s GDP—a significantly higher share than Japan’s 20.5%. Given South Korea’s export-oriented industrial structure and dependence on a few major conglomerates, the future of the manufacturing sector is critical to the nation’s economic stability. Therefore, it is essential for manufacturing firms and their employees to develop a comprehensive understanding of ESG management and actively participate in its implementation to drive meaningful and sustainable outcomes.

According to 2024 reports from the OECD, IMF, and the Bank of Korea, South Korea’s GDP stands at approximately USD 1.7 to 1.8 trillion, placing the country around 13th globally. Its exports, valued between USD 600 and 650 billion, rank 6th to 7th worldwide, while its per capita income ranges from USD 35,000 to 40,000. South Korea holds a strong position in several key industries: it ranks among the top three globally in home appliances, second in semiconductors, and first or second in shipbuilding. Globally, major challenges such as climate change, energy supply instability, the depletion of natural resources, and environmental degradation have led to a growing emphasis on ESG (environmental, social, and governance) practices. Given South Korea’s export-oriented economic structure, active engagement in ESG management has become imperative. Accordingly, this study focuses on ESG management practices among large manufacturing enterprises, particularly within the aforementioned leading industries.

This study addresses a critical gap in ESG research by shifting the focus toward manufacturing conglomerates, an area that has received comparatively less scholarly attention than marketing, human resources, and service industries. Specifically, it investigates how ESG management activities affect organizational trust, organizational commitment, and overall performance from the perspective of internal stakeholders—employees within large manufacturing firms. In addition, this study examines the moderating role of job position in shaping these relationships, recognizing that employees’ hierarchical status may influence how they perceive and respond to ESG initiatives. By applying structural equation modeling to survey data from 561 employees in leading manufacturing corporations actively practicing ESG management, this research offers novel insights into the psychological mechanisms linking ESG activities to key organizational outcomes.

The findings contribute both theoretically and practically by highlighting how ESG engagement can foster stronger employee trust and commitment, which in turn enhances organizational performance. These insights offer actionable guidance for corporate governance, enabling manufacturing leaders and ESG teams to craft more targeted and effective ESG strategies. Ultimately, this study not only advances the understanding of ESG’s internal impacts but also promotes a positive organizational climate that supports the broader adoption and success of ESG practices in the manufacturing sector. Consequently, the research questions of this investigation are as follows:

RQ-1: How do ESG management activities influence organizational trust and organizational commitment among employees in manufacturing conglomerates?

RQ-2: To what extent does organizational trust and commitment mediate the relationship between ESG management activities and organizational performance?

RQ-3: Does the employee’s job position moderate the relationship between ESG management activities and organizational trust, commitment, and performance?

RQ-4: How can manufacturing firms strategically leverage ESG initiatives to enhance employee perceptions and foster greater organizational engagement?

2. Literature Review

2.1. ESG Management

ESG management is derived from the initials of environmental (E), social (S), and governance (G) and refers to a management strategy that is formulated and implemented based on these three core pillars. ESG represents the evolution, normalization, and institutionalization of Corporate Sustainability Management (CSM) and corporate social responsibility (CSR) [15]. It embodies fundamental values directly linked to a company’s long-term survival and growth [10].

Unlike traditional CSR and creating shared value (CSV), ESG management takes a more strategic approach to addressing environmental, social, and governance challenges [16]. Today, many companies recognize the significance of long-term sustainability, which entails positively impacting the environment and society [17]. Additionally, sustainability has emerged as a critical factor in securing a competitive advantage, leading to the rapid adoption of ESG practices in corporate management [18].

As societal expectations for corporate responsibility continue to rise, ESG has become a key priority in business management. One of the crucial lessons learned from the COVID-19 pandemic is that companies cannot thrive—or even survive—without aligning with societal progress. Consequently, businesses have been actively engaging in initiatives such as CSR and CSV to foster stronger ties between corporations and society.

At the same time, pressing issues like climate change and environmental pollution have become global concerns that transcend individual nations and corporations. With environmental regulations becoming increasingly stringent and public awareness of sustainability growing, companies now recognize that an eco-friendly corporate image is directly tied to business performance. As a result, many organizations are prioritizing environmental responsibility and actively participating in sustainability initiatives.

Furthermore, employees within companies must also develop a strong awareness of environmental issues and actively engage in sustainability efforts. As ESG continues to shape the future of business, fostering a corporate culture that values environmental and social responsibility will be essential for long-term success. Therefore, ESG management activities can be understood not merely as extensions of social contribution, corporate social responsibility (CSR), or creating shared value (CSV) but as a comprehensive strategic approach designed to address pressing challenges related to the environment, society, and corporate governance. In this study, ESG management activities are defined as the formulation and implementation of management strategies that systematically integrate the three core pillars of ESG—environmental responsibility, social engagement, and sound governance. This approach emphasizes proactive and sustainable business practices that align corporate objectives with broader societal and environmental goals, ultimately enhancing both corporate resilience and long-term value creation.

2.2. Organizational Trust

Trust is generally defined as the expectation that another party’s future actions will be favorable or, at the very least, not harmful [19]. It is also a mutual belief that individuals will act ethically in their interactions with others [20]. According to Chung and Lee [21], organizational trust refers to employees’ expectation that the intentions and actions of their organization will align with common sense and general expectations. Similarly, Tan and Tan [22] define organizational trust as employees’ overall assessment of the organization’s reliability, emphasizing their confidence that the organization will act in ways that benefit them or, at the very least, do not cause harm.

Trust plays a crucial psychological and social role in interactions, facilitating cooperation and serving as a fundamental element of social capital and exchange relationships [19]. Establishing trust is essential for fostering employees’ voluntary and active cooperation within an organization. Furthermore, organizational trust is a key factor in maintaining a competitive advantage, as it enhances confidence in others’ words and actions while promoting goodwill. Organizational trust is typically categorized into institutional, supervisor, and coworker trust [23].

2.3. Organizational Commitment

The concept of organizational commitment was first introduced by March and Simon [24], who defined it as “the motivation to go beyond assigned tasks and actively engage in additional responsibilities”. Becker [25], emphasizing the behavioral aspect of commitment, described it as “a consistent pattern of attachment to an organization, driven by the rewards gained from staying and the costs associated with leaving”.

Prior research suggests that employees with higher organizational commitment tend to perform better than those with lower commitment [26]. Angel and Perry [27] highlighted its role as a key determinant of organizational performance, defining commitment as an employee’s attachment to their organization. Similarly, Allen and Meyer [28] described it as an attitude that reflects employees’ acceptance of organizational goals and values and their loyalty to the organization. Further expanding this idea, Meyer and Herscovitch [29] defined organizational commitment as a psychological state that drives employees to engage in organizational behaviors.

Empirical research by Li et al. [30] examined Leader–Member Exchange (LMX), sales performance, job satisfaction, organizational commitment, and turnover intention among 228 sales employees. Their findings revealed that job satisfaction and organizational commitment had a significant positive correlation with sales performance, while turnover intention negatively correlated with both variables. Additionally, domestic research suggests that high organizational commitment among employees positively influences customer service orientation, highlighting its importance in business success [31].

2.4. Organizational Performance

Organizational performance refers to the outcomes that an organization achieves through its operations and strategies. It is influenced by multiple factors, including organizational goals, strategy, culture, leadership, and structure, making it a multifaceted and context-dependent concept [32]. When studying public sector organizations, organizational performance measurement varies depending on the research objectives and can be defined through different performance indicators. Quinn and McGrath [33] identified organizational culture as a key factor influencing performance and introduced the Competing Values Approach as an analytical framework.

Previous studies have classified organizational performance into financial and non-financial performance indicators. Financial performance includes revenue growth and market share, while non-financial performance encompasses customer and employee satisfaction, market responsiveness, and quality improvements [34].

Furthermore, research has demonstrated that ESG (environmental, social, and governance) management performance positively affects financial performance, with its impact increasing over time [35]. Additionally, ESG performance is associated with positive business social outcomes [36].

Empirical studies on ESG management have also confirmed its positive impact on business performance. For instance, Lu et al. [37] analyzed the ESG activities of 79 publicly listed apparel manufacturing companies and 80 service-related firms, revealing that ESG initiatives significantly positively impact corporate performance. Similarly, Barrymore and Sampson [38] conducted a large-scale analysis of 13,313 U.S. firms from 2008 to 2018, examining the relationship between ESG practices and productivity. Their study found that ESG initiatives had a statistically significant positive effect on average labor productivity, further reinforcing the importance of ESG management in modern corporate strategy.

Based on the results of the empirical analysis, this study recognizes that both financial and non-financial outcomes may coexist as a result of corporate ESG management activities. Notably, the analysis confirmed that the financial performance of the three companies studied has shown consistent annual growth. This observation led to the conclusion that, beyond traditional financial drivers, other factors—potentially stemming from ESG-related initiatives—may have contributed to this sustained growth. Specifically, it is posited that ESG management activities enhance non-financial outcomes such as corporate image, employees’ pride in their company, and confidence in the company’s products or services. These intangible benefits, in turn, can strengthen employees’ organizational trust and commitment, ultimately exerting a positive impact on overall organizational performance. Building on these insights, this study seeks to further investigate how ESG management influences these interconnected psychological and organizational mechanisms, offering a more comprehensive understanding of the pathways through which ESG activities contribute to both tangible and intangible corporate success.

3. Research Model and Hypothesis

3.1. Research Model

This study examines the impact of ESG management activities in large manufacturing enterprises on organizational trust, commitment, and performance based on prior research and theoretical background. Additionally, it seeks to verify the moderating effect of hierarchical position in the relationship between ESG management activities and organizational performance. The research model designed to achieve these objectives is illustrated in Figure 1.

3.2. Hypothesis

3.2.1. ESG Management Activities and Organizational Trust

According to organizational identity theory, strengthening corporate social responsibility (CSR) initiatives fosters a positive perception of the organization among its employees [39]. CSR activities enhance employees’ perception of their organization, increasing their level of support and trust, a concept that extends to ESG management practices.

Research analyzing the relationship between corporate environmental responsibility and performance has shown that environmental management strategies significantly influence goodwill-based trust. By contrast, environmental risk management strategies impact professional and goodwill-based trust [40]. Furthermore, a study on small- and medium-sized enterprises (SMEs) found that ESG activities positively affect intrapreneurship and trust, enhancing organizational effectiveness [41].

Building upon these prior studies, this research hypothesizes that ESG management activities in large manufacturing enterprises positively influence organizational trust:

Hypothesis 1. 

ESG management activities in large manufacturing enterprises will significantly impact employees’ organizational trust.

Hypothesis 1-1. 

Environmental (E) activities will significantly impact employees’ organizational trust.

Hypothesis 1-2. 

Social (S) activities will significantly impact employees’ organizational trust.

Hypothesis 1-3. 

Governance (G) activities will significantly impact employees’ organizational trust.

3.2.2. ESG Management Activities and Organizational Commitment

Previous studies examining the relationship between ESG management activities and organizational commitment indicate that environmental, social, and governance initiatives significantly influence employees’ commitment within various industries, including food service companies [42]. Choi and Kim [43] found that organizational commitment is shaped by individual characteristics, job environment, and corporate culture, improving management performance while reducing turnover and absenteeism. Similarly, Ha and Lee [31] noted that higher organizational commitment enhances customer service orientation. Koller et al. [44] suggested that ESG awareness strengthens employees’ motivation and organizational commitment by promoting sustainable goal setting, ultimately boosting productivity. Additionally, Kim and Lee [45] reported that integrating corporate social responsibility (CSR) into business operations enhances employees’ organizational commitment.

Based on these findings, it is reasonable to assume a positive relationship between ESG management activities and organizational commitment, leading to the following hypotheses:

Hypothesis 2. 

ESG management activities in large manufacturing enterprises will significantly impact employees’ organizational commitment.

Hypothesis 2-1. 

Environmental (E) activities will significantly impact employees’ organizational commitment.

Hypothesis 2-2. 

Social (S) activities will significantly impact employees’ organizational commitment.

Hypothesis 2-3. 

Governance (G) activities will significantly impact employees’ organizational commitment.

3.2.3. ESG Management Activities and Organizational Performance

Prior research on ESG management activities and organizational performance suggests that, when employees fully understand and support a company’s ESG strategies and vision, ESG management activities lead to better organizational performance [46]. Park and Han (2021) analyzed the impact of ESG management on consumer responses and corporate image formation, finding that ESG initiatives contribute to creating a warm and competent corporate image, positively influencing business performance [47]. Eliwa et al. [36] also argue that ESG management activities yield positive business outcomes.

Synthesizing these findings, a positive relationship between ESG management activities and organizational performance can be inferred. Thus, this study proposes the following hypotheses:

Hypothesis 3. 

ESG management activities in large manufacturing enterprises will significantly impact organizational performance.

Hypothesis 3-1. 

Environmental (E) activities will significantly impact organizational performance.

Hypothesis 3-2. 

Social (S) activities will significantly impact organizational performance.

Hypothesis 3-3. 

Governance (G) activities will significantly impact organizational performance.

3.2.4. Organizational Trust and Organizational Performance

Research has consistently highlighted the significance of organizational trust in various contexts. Among corporate sustainability efforts, organizational trust directly influences the achievement of business goals [48]. Additionally, a study by Chae and Choi [49] examining the impact of organizational trust on security performance in court security personnel found a significant positive relationship between trust and performance. Similarly, Bong and Lee [50] investigated hotel chefs and found that employees with high levels of trust in their organizations demonstrated higher job performance.

Furthermore, research on ESG management activities in the food service industry suggested that ESG initiatives positively impact job satisfaction and organizational commitment, ultimately improving performance [42]. While prior studies show variations in results, they collectively suggest that organizational trust significantly influences organizational performance.

Thus, this study presents the following hypothesis:

Hypothesis 4. 

Organizational trust will significantly impact organizational performance.

3.2.5. Organizational Commitment and Organizational Performance

Previous studies have examined the relationship between organizational commitment and performance. Wagner and Rush [51] found that trust in supervisors positively impacts organizational commitment, with subordinates’ trust in their leaders significantly influencing workplace behavior and, ultimately, organizational performance. Fu and Deshpande (2014) demonstrated that organizational commitment significantly impacts performance among employees in large insurance corporations [52]. Seo [53] argued that higher organizational commitment reduces turnover rates and enhances performance by fostering proactive work attitudes. Kwon [54] also found that organizational commitment positively influences service innovation performance, emphasizing the need for strategies to enhance employee commitment.

Based on these findings, the following hypothesis was proposed:

Hypothesis 5. 

Organizational commitment will significantly impact organizational performance.

3.2.6. Moderating Effect of Job Position Difference

A moderating effect occurs when a third variable influences the relationship between an independent variable and a dependent variable. In a corporate setting, an employee’s job position reflects their role and level of responsibility within the organization. Higher-position employees typically have greater decision-making authority and access to company resources, which can enhance their ability to drive innovation within the organization.

According to Lee and Eom [55], employees in higher positions tend to possess greater interpersonal and individual competencies. Their study suggests that managers and executives have stronger business capabilities compared to entry-level employees. Additionally, the scope of tasks, responsibilities, and authority varies across different job positions [56]. As a result, the nature of work experiences differs depending on one’s position, which in turn may impact work performance [57,58].

Building on these previous studies, this research aims to examine whether job position moderates the relationship between ESG management activities (independent variable) and organizational performance (dependent variable) in large manufacturing firms. Accordingly, the following hypotheses were proposed:

Hypothesis 6. 

Job position will moderate the relationship between ESG management activities and organizational performance in large manufacturing firms.

Hypothesis 6-1. 

Job position will moderate the relationship between environmental (E) activities and organizational performance in large manufacturing firms.

Hypothesis 6-2. 

Job position will moderate the relationship between social (S) activities and organizational performance in large manufacturing firms.

Hypothesis 6-3. 

Job position will moderate the relationship between governance (G) activities and organizational performance in large manufacturing firms.

3.3. Operational Definition of Variables

Appendix A presents the survey items used to measure the variables in this study. All items were assessed using a five-point Likert scale, ranging from “strongly disagree” to “strongly agree”, to capture respondents’ perceptions with consistency and clarity.

ESG (environmental, social, and governance) management activities go beyond corporate social responsibility (CSR) and shared value creation (CSV) to serve as a strategic approach for addressing environmental, social, and governance-related challenges [16]. In this study, ESG management activities are defined as the process of establishing and implementing management strategies based on the three key ESG pillars: environmental (E), social (S), and governance (G) [15].

To develop the survey questionnaire, previous studies by Park et al. [16], Piao et al. [59], and Daugaard [60] were referenced. The questionnaire consists of three sub-dimensions of ESG activities—environmental (E), social (S), and governance (G). A total of 12 items were adapted and refined for this study, including statements such as “Our company strives to develop eco-friendly products and services.”

Previous studies have defined organizational trust as employees’ willingness to rely on and follow their organization, even in uncertain situations [61]. Based on these prior findings, this study defines organizational trust as “employees’ expectation that the organization’s intentions and actions will align with common sense and general expectations” [2].

The survey items were adapted from studies by Jun [62] and Jung et al. [11], which employed job satisfaction scales. The questionnaire consists of five items, such as “Our company’s products and services are trustworthy”.

High levels of organizational commitment offer numerous advantages to organizations [63]. Organizations provide employees with financial and psychological support, as well as opportunities for professional development. In turn, employees foster close bonds with their organization, leading to greater engagement and commitment, ultimately contributing to improved performance.

Organizational commitment refers to employees’ belief in organizational goals and values, their desire to remain with the organization, and their loyalty toward it [64,65]. This study defines organizational commitment as “the strong willingness to remain a part of the organization, the motivation to work diligently for its aspirations, and the readiness to embrace its values and goals” [66].

The survey items were adapted from studies by Kang [67] which utilized job satisfaction scales. The questionnaire consists of four items, such as “I feel a sense of belonging and ownership in my current organization”.

In the past, corporate performance was assessed separately in terms of financial, customer, and organizational performance. However, recent studies increasingly integrate financial and non-financial performance into a comprehensive measure of organizational performance [68].

This study defines organizational performance as “the tangible outcomes of corporate management activities, focusing on non-financial results”. Six key indicators of non-financial performance were selected based on respondents’ perceptions: product/service awareness, brand recognition, corporate reputation, product/service reliability, potential customer acquisition, and product/service repurchase rates.

The survey items were adapted from Kaplan and Norton [69] and Kim [70]. The questionnaire includes six items, such as “Our company’s brand recognition (image) is improving”.

3.4. Data Collection and Research Methods

The sample data for this study were collected through a survey targeting employees from three large manufacturing corporations—Company L, Company H, and another Company H—that have actively implemented ESG initiatives. They are among the top 30 conglomerates in South Korea, operating across diverse industries such as consumer electronics, semiconductor components, and shipbuilding. These companies generate a higher proportion of their revenue from global markets compared to domestic sales. Given the recent intensification of global interest in adherence to environmental, social, and governance (ESG) management practices, particularly following international regulatory shifts such as the European Union’s Corporate Sustainability Reporting Directive (CSRD), these firms offer a relevant and timely context for the present study. Accordingly, employees from these companies were selected as the sample population, as they represent key stakeholders actively engaged in firms that are at the forefront of integrating ESG strategies into their business operations within highly globalized industries.

The survey was conducted from 10 to 20 October 2024. A total of 600 questionnaires (200 per company) were distributed, and 587 responses were collected. However, after excluding 26 responses due to uniform answers or insincere responses unsuitable for analysis, a final sample of 561 valid responses was used for empirical analysis. For data analysis, SPSS 29.0 was used for frequency and factor analyses, while AMOS 29.0 was employed to test the research model and hypotheses.

4. Empirical Analysis Results

4.1. Sample Characteristics

An analysis of the gender distribution among the 561 survey respondents reveals that males account for the majority, with 359 individuals (64.0%), while females make up 202 (36.0%). In terms of age groups, 90 respondents (16.0%) are in their 20s, 82 (14.6%) are in their 30s, 164 (29.2%) are in their 40s, 176 (31.4%) are in their 50s, and 49 (8.7%) are aged 50 and above. Regarding educational background, 118 respondents (21.0%) have a high school diploma, 380 (67.7%) hold a bachelor’s degree, and 63 (11.2%) have completed graduate-level education or higher. This indicates a high level of educational attainment, reflecting the prevalence of highly educated individuals in large corporations. In terms of job positions, 133 respondents (23.7%) are entry-level employees, 168 (29.9%) hold assistant manager positions, 112 (20.0%) are managers, 72 (12.8%) are senior managers, and 76 (13.59%) hold director-level positions or higher.

When asked about their departments, 154 respondents (27.5%) work in sales and marketing, 148 (26.4%) in production and operations, 84 (15.0%) in other fields, 50 (8.9%) in research and development, 40 (7.11%) in planning and management, 61 (10.9%) in finance and accounting, and 24 (4.3%) in human resources. Regarding work experience, 109 respondents (19.4%) have less than five years of experience, 158 (28.2%) have between five and ten years, 79 (14.1%) have between ten and fifteen years, and 215 (38.3%) have over fifteen years of experience. These findings suggest a preference for employment in large manufacturing corporations, where working conditions tend to be more favorable than in small- and medium-sized enterprises. The results are summarized in

Table 1. Demographic characteristics.

Categories		n(%)	Categories		n(%)
Gender	Male	359(64.0)	Department	Planning Team	40(7.1)
	Female	202(36.0)		Sales(Marketing) Team	154(27.5)
Age	Twenties	90(16.0)		Production Control Team	148(26.4)
	Thirties	82(14.6)		R&D Team	50(8.9)
	Forties	164(29.2)		HR Team	24(4.3)
	Fifties	176(31.4)		Finance and Accounting Dept.	61(10.9)
	Above Fifties	49(8.7)		Others	84(15.0)
Academic background	High School Graduate	118(21.0)	Years of Service	less than 5 years	109(19.4)
	College Graduate	380(67.7)		5 years or more~ less than 10 years	158(28.2)
	Above Graduate school	63(11.2)
Job position	Staff	133(23.7)		10 years or more~ less than 15 years	79(14.1)
(rank)	Assistant Manager	168(29.9)
	Manager	112(20.0)		15 years or more	215(38.3)
	Senior Manager	72(12.8)	Authenticity of ESG Activity	Y	381(67.9)
	General Manager and above	76(13.5)		N	180(32.1)
Total					561(100)

.

4.2. Reliability and Validity Testing

In this study, confirmatory factor analysis (CFA) was conducted to test the reliability and validity of the variables used. The reliability of measurement items was assessed using Cronbach’s alpha (α), calculated using SPSS 29.0, with a threshold of 0.6 or higher, indicating high internal consistency and reliability among the items. As shown in

Table 2. Reliability and validity for the measurement model.

Construct		Estimate		t-Value	Cronbach‘s ɑ	C.R.	AVE
		Std. Estimate	S.E.
Environmental	E4	0.766			0.875	0.977	0.731
	E2	1.027	0.075	16.952 ***
Social	S4	0.931			0.904	0.975	0.712
	S3	0.903	0.040	27.299 ***
Governance	G4	0.742			0.920	0.977	0.731
	G2	0.947	0.051	23.355 ***
	G1	0.932	0.050	23.094 ***
Organizational Trust	OT4	0.802			0.917	0.977	0.727
	OT2	0.906	0.048	24.505 ***
	OT1	0.893	0.049	24.187 ***
Organizational Commitment	OC4	0.553			0.824	0.976	0.720
	OC3	0.815	0.120	12.199 ***
	OC2	0.838	0.125	12.158 ***
Organizational Performance	OP4	0.813			0.958	0.982	0.741
	OP2	0.922	0.040	26.825 ***
	OP1	0.932	0.041	27.106 ***

Notes: χ² = 340.596, χ²/df = 3.827, p = 0.000, GFI = 0.931, RMR = 0.036, IFI = 0.962, TLI = 0.949, CFI = 0.962, and RMSEA = 0.071; *** p < 0.001, C.R.: composite reliability, and AVE: average variance extracted.

, the reliability analysis of the measurement tool revealed that all constructs (environmental (E), social (S), governance (G), organizational trust, organizational commitment, and organizational performance) achieved Cronbach’s alpha values above 0.8, demonstrating a satisfactory level of reliability.

The goodness-of-fit indices for the measurement model were as follows: χ² = 340.596 (df = 89, p < 0.001), χ²/df = 3.827, GFI = 0.931 (≥0.8), IFI = 0.962 (≥0.9), TLI = 0.949 (≥0.9), CFI = 0.962 (≥0.9), and RMR = 0.036 (≤0.05). These values indicate that the model meets the required fit criteria. Convergent validity was assessed based on standardized factor loadings of 0.5 or higher, a composite reliability (C.R.) of at least 0.7, and an average variance extracted (AVE) of 0.5 or higher, as recommended by Fornell and Larcker [71]. As presented in Table 2, all measurement items in this study met these thresholds, confirming convergent validity.

Discriminant validity was evaluated by comparing the square root of the AVE for each construct with the correlation coefficients between constructs [71]. As shown in

Table 3. Discriminant validity.

Construct	(1)	(2)	(3)	(4)	(5)	(6)
(1) Environmental	(0.855)
(2) Social	0.662 **	(0.844)
(3) Governance	0.517 **	0.630 **	(0.855)
(4) Organizational Trust	0.475 **	0.525 **	0.539 **	(0.853)
(5) Organizational Commitment	0.157 **	0.262 **	0.383 **	0.249 **	(0.849)
(6) Organizational Performance	0.458 **	0.541 **	0.611 **	0.502 **	0.319 **	(0.861)

Notes: The bold numbers are the AVE square root values, ** p < 0.01.

, the square root of each construct’s AVE exceeded the correlation coefficients between constructs, confirming that discriminant validity was achieved.

4.3. Hypothesis Testing

Structural equation modeling (SEM) enabled us to explore the causal relationships among the constructs in our model and to evaluate how well the proposed model fits the observed data [71]. This study employed SEM path analysis to examine the impact of ESG management activities on organizational trust, commitment, and performance. Additionally, it investigated the effect of organizational trust on organizational commitment and analyzed the moderating effect of employees’ job positions. The measurement model’s reliability and validity were confirmed, providing a solid foundation for testing the structural model. The results of the structural model fit analysis indicated χ² = 280.700 (df = 90, p < 0.001), χ²/df = 3.119, meeting the recommended significance level (p > 0.05). Moreover, the fit indices (NFI = 0.961, RFI = 0.948, IFI = 0.973, TLI = 0.964, CFI = 0.973, and RMSEA = 0.062) suggest that the model demonstrates an overall good fit. The results of hypothesis testing using structural equation modeling are summarized in Figure 2 and

Table 4. Results of hypothesis testing.

Hypotheses: Path				Std. Estimate	S.E.	t-Value	p-Value	Results
H1-1:	Environmental	→	Organizational trust	0.119	0.040	2.640 **	0.005	Accepted
H1-2:	Social	→		0.225	0.057	4.149 ***	***	Accepted
H1-3:	Governance	→		0.395	0.066	7.584 ***	***	Accepted
H2-1:	Environmental	→	Organizational Commitment	−0.096	0.041	−2.402 *	0.016	Accepted
H2-2:	Social	→		0.100	0.056	1.538	0.124	Rejected
H2-3:	Governance	→		0.340	0.066	5.490 ***	***	Accepted
H3-1:	Environmental	→	Organizational Performance	0.096	0.037	2.466 *	0.014	Accepted
H3-2:	Social	→		0.146	0.053	2.806 **	0.005	Accepted
H3-3:	Governance	→		0.352	0.066	6.519 ***	***	Accepted
H4:	Organizational Trust	→	Organizational Performance	0.149	0.053	3.156 **	0.002	Accepted
H5:	Organizational Commitment	→		0.121	0.045	3.074 ***	0.002	Accepted

Note: χ² = 280.700, df = 90, p = 0.000, NFI = 0.961, RFI = 0.948, IFI = 0.973, TLI = 0.964, CFI = 0.973, and RMSEA = 0.062; *** p < 0.001, ** p < 0.01, and * p < 0.05.

.

First, Hypothesis 1 examined the impact of ESG activities in large manufacturing corporations on organizational trust. The analysis revealed that the environmental (E) factor (standardized coefficient = 0.119, t = 2.840, p < 0.05), social (S) factor (standardized coefficient = 0.225, t = 4.149, p < 0.001), and governance (G) factor (standardized coefficient = 0.395, t = 7.584, p < 0.001) all had statistically significant positive effects on organizational trust. Consequently, Hypotheses 1-1, 1-2, and 1-3 were all supported.

These findings indicate that, while the impact of corporate ESG activities on organizational trust can be mixed, employees’ perceptions of ESG initiatives in large manufacturing firms generally contribute positively to building organizational trust. This aligns with previous studies [40,72]. Additionally, the results suggest that the hierarchical culture and collectivist organizational dynamics still prevalent in large manufacturing corporations may influence employees’ trust formation, reflecting the enduring top–down management style in Korean corporate culture.

Hypothesis 2 examined the impact of corporate ESG management activities on organizational commitment. The analysis revealed that the environmental (E) factor (standardized coefficient = –0.096, t = –2.402, p < 0.05) had a statistically significant negative effect, while the social (S) factor (standardized coefficient = 0.100, t = 1.538, p = 0.124) was not statistically significant.

According to previous studies, corporate managers pursuing ESG or CSR initiatives often face increased non-productive expenditures, which can negatively affect corporate performance and value [73,74]. Additionally, it has been suggested that corporate environmental (E) activities can have a negative impact on firm value (Tobin’s Q), as they may lead to short-term cost increases and reduced profitability, ultimately affecting firm value negatively [75]. From this perspective, the adoption of ESG initiatives may impose additional financial burdens on companies, potentially leading to internal resistance. This aligns with previous findings that suggest such resistance can negatively impact organizational commitment [13,15,76]. Consequently, Hypothesis 2-2 was rejected.

However, the governance (G) factor (standardized coefficient = 0.327, t = 4.567, p < 0.001) demonstrated a statistically significant positive effect. This result supports the notion that governance (G) activities positively influence customer trust [77]. Effective governance enhances transparency in decision making and implementation, increases internal autonomy and efficiency, and fosters higher organizational commitment among employees [78]. Furthermore, a transparent and well-structured governance system has been found to enhance investor confidence, leading to better capital market evaluations [70]. Therefore, Hypotheses 2 and 3 were supported.

Hypothesis 3 investigated the impact of ESG management activities in large manufacturing corporations on organizational performance. The analysis results indicated that the environmental (E) factor (standardized coefficient = 0.096, t = 2.466, p = 0.014), social (S) factor (standardized coefficient = 0.146, t = 2.806, p < 0.01), and governance (G) factor (standardized coefficient = 0.352, t = 6.519, p < 0.001) all had statistically significant positive effects.

According to previous studies, all three ESG components—environmental (E), social (S), and governance (G)—positively influence business performance [79,80,81]. Additionally, research by Mohammad and Wasiuzzaman [82] and Nisar et al. [83] confirms that ESG initiatives positively affect corporate financial performance and have a significant impact on overall business success. The findings of this study reaffirm these previous research conclusions. As a result, Hypotheses 3-1, 3-2, and 3-3 were all supported.

Hypothesis 4 examined the impact of organizational trust on organizational performance. The analysis results indicated a standardized coefficient of 0.149 (t = 3.156, p < 0.01), demonstrating a statistically significant positive effect. These findings confirm that trust within an organization serves as a key driver of both corporate competitiveness and organizational performance. Furthermore, organizational trust acts as a positive factor in the relationship between business strategy and performance outcomes. Consequently, Hypothesis 4 was supported.

Hypothesis 5 assessed the relationship between organizational commitment and organizational performance. The analysis showed a standardized coefficient of 0.121 (t = 3.74, p < 0.01), confirming statistical significance and leading to the acceptance of Hypothesis 5. This result aligns with previous studies, which suggest that, when employees’ commitment to their colleagues, supervisors, and the organization itself is supported by a strong organizational system, it enhances overall job performance [84]. Additionally, it reaffirms prior research indicating that organizational commitment plays a crucial role in performance outcomes by fostering the internalization of organizational goals, values, and mission [85].

To examine the moderating effect of job position on the relationship between ESG management activities and organizational performance in large manufacturing corporations, this study conducted a multi-group analysis. Multi-group analysis allows for a comparison of path coefficients across different groups to determine whether the relationships in the model vary significantly between them. The chi-square difference test using AMOS 29.0 revealed that, among employees in non-managerial positions (below manager level), the environmental (E) factor (t = 2.071, p < 0.05) and governance (G) factor (t = 7.985, p < 0.001) had a statistically significant positive impact on organizational performance (see

Table 5. Moderating effect testing.

Hypotheses: Path				Lower-Job-Position Group (n = 301)			High-Job-Position Group (n = 260)
				Estimate	t-Value	p-Value	Estimate	t-Value	p-Value
H6-1:	Environmental	→	Organizational Performance	0.105	2.071 *	0.038	0.067	1.650	0.099
H6-2:	Social	→		0.094	1.366	0.172	0.265	3.291 ***	0.000
H6-3:	Governance	→		0.555	7.985 ***	0.000	0.176	1.530	0.126

*** p < 0.001, * p < 0.05.

). This indicates that job position moderates the effect of ESG activities on performance.

Similarly, the analysis of managerial-level employees (manager and above) showed that the social (S) factor (t = 3.291, p < 0.001) had a statistically significant impact on organizational performance, suggesting that job position plays a moderating role in this relationship.

The chi-square difference test using AMOS 29.0 was conducted to examine the moderating effect of job position on the relationship between ESG activities and organizational performance. The comparison between the moderating model and constrained model showed a chi-square difference of Δχ²(1) = 8.284 (moderating model: χ² = 545.912, constrained model: χ² = 554.196), which indicates statistical significance at the five percent level. Since this value exceeds the critical threshold of 7.81, the results indicate that job position significantly moderates the relationship between ESG activities and organizational performance. Consequently, Hypothesis 6 was supported.

5. Conclusions and Future Research

This study examines the impact of ESG (environmental, social, and governance) management activities in large manufacturing corporations on organizational trust, organizational commitment, and organizational performance. Additionally, it seeks to verify the moderating effect of job position on the relationship between ESG management activities and organizational performance. While numerous previous studies have focused on external stakeholders’ reactions to corporate ESG activities and their influence on employees’ attitudes and behaviors, this study is significant in analyzing the perceptions of employees within large manufacturing corporations—internal stakeholders—regarding ESG management.

The results of the hypothesis testing indicate that the environmental, social, and governance (ESG) dimensions positively influenced organizational trust. Regarding organizational commitment, the environmental dimension exerted a negative effect, governance had a positive effect, and the social dimension demonstrated no significant effect. Furthermore, all three ESG dimensions positively impacted organizational performance. Finally, both organizational trust and commitment had positive effects on organizational performance. Based on these findings, the following theoretical implications, practical implications, limitations, and future research directions are suggested.

5.1. Theoretical and Practical Implications

This study categorizes the ESG (environmental, social, and governance) management activities of large manufacturing enterprises into three distinct components—environmental (E), social (S), and governance (G)—and examines their impact on internal stakeholders, specifically organizational members. Based on the empirical results, several theoretical and practical implications can be drawn as follows:

First, while prior empirical research on ESG management activities has predominantly concentrated on domains such as marketing, human resources, and the service industry [13,14], this study extends the scope of ESG scholarship by applying it to large manufacturing enterprises. This expansion contributes to the academic literature by addressing a relatively underexplored sector, thereby offering novel insights into ESG activities in production-oriented firms.

Second, although much of the extant literature has emphasized the effects of ESG initiatives on external stakeholders—namely, consumers, investors, and shareholders—this study focuses on internal stakeholders, i.e., organizational members, and empirically investigates how ESG management activities shape their attitudes and behaviors. This perspective enriches the field of organizational behavior by illustrating that ESG engagement exerts significant influence within the organization itself.

Third, by empirically demonstrating that ESG management activities positively affect organizational trust and commitment among employees, this study substantiates the notion that ESG is not merely an external signaling mechanism but also a vital internal driver of employee perceptions and behaviors. This finding affirms the growing scholarly consensus that ESG is intertwined with both relational and performance-oriented outcomes within organizations.

Fourth, importantly, this research highlights that ESG initiatives strengthen internal organizational cohesion by fostering employees’ trust and commitment. These results imply that ESG engagement serves as a dual-benefit strategy: enhancing external corporate reputation and simultaneously cultivating a more unified and motivated workforce. This duality reinforces recent conceptualizations of ESG as a holistic corporate strategy rather than a peripheral or compliance-driven activity.

From a practical perspective, this study offers the following managerial implications:

First, the findings offer actionable insights for managers of large manufacturing enterprises seeking to formulate effective ESG strategies. The empirical evidence suggests that the benefits of heightened organizational trust—stimulated by ESG engagement—can surpass the costs associated with implementing such initiatives. Consequently, companies should prioritize the design of ESG programs that explicitly aim to build and sustain employee trust, ultimately enhancing organizational performance.

Second, given the rising prominence of ESG as an integral business strategy, particularly in light of global sustainability goals and regulatory pressures, it is imperative for manufacturing firms—many of which face difficulties in attracting and retaining specialized talent—to implement ESG programs that actively engage employees. Facilitating employee participation in ESG-related activities can foster a sense of purpose, belonging, and alignment with corporate values, thereby contributing to talent retention and satisfaction.

Third, this study demonstrates that organizational commitment is a critical determinant of overall organizational performance. Accordingly, management should ensure that employees are well-informed and meaningfully engaged with ESG management activities. A comprehensive, organization-wide communication strategy is essential to promote awareness, convey the strategic importance of ESG, and instill a sense of pride among employees in their company’s sustainability endeavors.

Fourth, as ESG reporting and disclosure practices evolve globally (e.g., the European Sustainability Reporting Standards and ISSB frameworks), manufacturing firms are increasingly expected to provide transparent accounts of both external and internal ESG impacts. Companies that effectively integrate ESG into their internal management practices—not only to satisfy external reporting requirements but to genuinely enhance employee relations—will likely gain a competitive advantage in attracting stakeholders who value sustainable business conduct.

In conclusion, this study provides both theoretical and practical contributions to the understanding of ESG management activities in the context of large manufacturing enterprises. By highlighting the internal implications of ESG initiatives for employee perceptions, trust, commitment, and organizational performance, this research underscores the multifaceted value of ESG engagement. Firms that strategically align ESG practices with internal stakeholder interests can foster a more sustainable, cohesive, and high-performing organization while simultaneously advancing broader corporate sustainability objectives.

5.2. Limitations and Future Research Directions

While this study offers valuable theoretical and practical insights through empirical analysis, several limitations should be acknowledged, which may inform avenues for future research. First, this study employed survey data collected from employees within selected large manufacturing enterprises. As a result, the generalizability of the findings across the broader manufacturing industry—and to other industrial sectors—may be constrained. Organizational characteristics, such as corporate culture, ESG maturity, and industry-specific regulatory environments, could influence employee perceptions of ESG activities in ways that were not fully captured in this research.

Second, although multiple validated survey items were used to measure ESG management sub-dimensions—namely, organizational trust, organizational commitment, and organizational performance—the responses may have been subject to social desirability bias. Given that respondents were employees of the companies under study, there is a possibility that participants provided favorable evaluations of their organization’s ESG practices to align with perceived expectations or corporate norms. Incorporating methods such as anonymized third-party assessments, triangulation with objective performance indicators, or implicit measurement techniques could mitigate this bias in future studies.

Third, the lack of diversity in the sample selection represents another limitation. This study primarily focused on employees from a relatively homogenous set of large-scale manufacturing enterprises, potentially overlooking variations in perceptions among different demographic groups, job roles, organizational levels, and geographic locations. Expanding the sample to include a more heterogeneous workforce could yield richer and more generalizable insights.

In light of these limitations, several directions for future research are recommended. First, considering that ESG management environments and stakeholder expectations vary across industries and organizational contexts, comparative studies spanning diverse sectors—including services, technology, and small and medium-sized enterprises (SMEs)—are warranted. Such cross-industry analyses could reveal nuanced differences in how ESG initiatives influence internal stakeholder attitudes and behaviors.

Second, as this study concentrated on large manufacturing enterprises, future research should explore the potential moderating effects of firm size. Comparative investigations between large corporations, mid-sized companies, and SMEs may uncover size-dependent patterns in ESG engagement and its internal outcomes.

Third, to address limitations associated with survey-based measurement, future studies should incorporate standardized ESG evaluation frameworks, such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), or emerging International Sustainability Standards Board (ISSB) guidelines. Utilizing such established criteria can enhance the reliability, validity, and comparability of ESG measurement across studies and contexts.

Fourth, future research should deliberately account for greater diversity in survey participants by including variables such as age, gender, tenure, and job function. Employing multi-group analyses or structural equation modeling techniques that consider subgroup differences could provide deeper insights into how individual characteristics moderate the relationships between ESG practices and employee outcomes.

Finally, longitudinal research designs are recommended to examine how changes in ESG management practices over time affect employee trust, commitment, and performance. Given the dynamic and evolving nature of ESG priorities in response to regulatory, societal, and technological changes, time-sensitive analyses would contribute significantly to understanding the long-term internal impacts of ESG strategies.