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Article

Disaggregating ESG Mechanisms: The Mediating Role of Stakeholder Pressure in the Financial Performance of Logistics Firms

by
A Young Choi
1,
Dohyun Kim
2,* and
Joonho Na
2
1
Cooperative Course in Convergence Technology Systems Engineering, Korea University, Sejong-si 30019, Republic of Korea
2
Department of Logistics Research, Korea Transport Institute, Sejong-si 30147, Republic of Korea
*
Author to whom correspondence should be addressed.
Sustainability 2025, 17(19), 8840; https://doi.org/10.3390/su17198840
Submission received: 25 August 2025 / Revised: 18 September 2025 / Accepted: 29 September 2025 / Published: 2 October 2025
(This article belongs to the Special Issue ESG Management, Performance, and Corporate Sustainability: Insights and Innovations)
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Abstract

This research investigates the impact of Environmental, Social, and Governance (ESG) practices on the financial performance of logistics firms, with a focus on the mediating role of stakeholder pressure. Utilizing survey data collected from Korean logistics firms (N = 256 valid responses) and employing structural equation modeling, the findings indicate that social practices exert a significant direct effect on financial outcomes. Conversely, environmental and governance practices impact financial performance indirectly, through stakeholder pressure. These findings suggest that ESG activities impact financial performance via distinct mechanisms, contingent upon the specific ESG dimension and the level of stakeholder engagement. The study advances ESG literature by providing a disaggregated analysis of ESG effectiveness and empirically confirming stakeholder pressure as a critical pathway. Practically, the results underscore the need for logistics firms to align their ESG strategies with stakeholder expectations and institutional pressures, thereby optimizing both sustainability and financial performance.

1. Introduction

Environmental, Social, and Governance (ESG) factors have emerged as pivotal non-financial indicators to assess a company’s commitment to sustainable growth. ESG encapsulates a strategic shift from short-term profit maximization toward long-term corporate sustainability, emphasizing concrete actions in areas such as carbon neutrality, green logistics, labor rights, and ethical governance [1]. This paradigm reflects the evolving nature of business responsibility, where sustainability encompasses environmental accountability, social equity, and transparent governance structures [2]. As such, ESG is increasingly recognized as a core operational mechanism for achieving sustainability and addressing the broader challenges of climate change and carbon neutrality.
ESG issues are therefore gaining increasing importance, in line with the growing demand for corporate sustainability [3]. Reflecting this trend, more firms are integrating sustainability into their strategic frameworks and proactively disclosing ESG-related data, resulting in a significant transformation in both business models and management paradigms [4]. Firms that have shifted their focus to ESG factors and thus have a greater awareness of sustainability can create new virtuous approaches to business [5,6].
The logistics industry has emerged as a prominent source of greenhouse gas (GHG) emissions, accounting for approximately 12% of global energy-related CO2 emissions [7]. As the sector undergoes accelerated digital transformation and automation, its environmental footprint is expected to increase due to the corresponding rise in energy consumption. Furthermore, the logistics sector’s reliance on a labor-intensive operational structure [8] renders it particularly susceptible to social-related challenges. These structural characteristics collectively underscore the imperative for logistics firms to incorporate ESG considerations into their strategic agendas to achieve long-term sustainability and resilience.
Stakeholder expectations further compound this imperative. As firms strive to maintain legitimacy and continuity through their relationships with diverse stakeholders, they face mounting pressure to mitigate negative externalities associated with their operations [9]. ESG considerations are now embedded within corporate strategies, prioritizing the interests of stakeholders.
As profit-driven entities, logistics firms face the challenge of aligning sustainability goals with financial outcomes. Therefore, understanding whether ESG initiatives can serve as a mechanism for improving financial outcomes is critical. If ESG engagement contributes to enhanced financial performance, firms can achieve the dual objectives of economic viability and sustainable responsibility. Accordingly, this study aims to empirically investigate the impact of ESG activities on the financial performance of logistics firms, with a specific focus on the mediating role of stakeholder pressure in the Korean context.

2. Literature Review and Research Questions

The relationship between ESG (Environmental, Social, and Governance) performance and firm-level financial outcomes has attracted increasing scholarly attention across various disciplines. Prior studies on this subject can be broadly categorized into three thematic domains: direct effects of ESG on financial performance, mediated or moderated effects, particularly those involving stakeholder pressure, and sector-specific studies examining industry-level variations in ESG impact.

2.1. Direct Effects of ESG on Financial Performance

Regarding direct effects, numerous empirical investigations have established a positive association between overall ESG performance and firm value. A comprehensive meta-analysis by Friede et al. [10] synthesized findings from over 2200 studies spanning four decades, revealing that approximately 90% reported non-negative ESG and corporate financial performance associations, with over 60% documenting positive relationships. These results remained consistent across regions, time periods, industries, and asset classes. Using global panel data, Chen et al. [11] demonstrated that ESG performance significantly enhances financial outcomes, particularly for large firms operating in high-risk environments.
Similarly, Velte [12] found that ESG scores, especially governance indicators, are positively related to accounting-based performance measures such as ROA among German listed companies. Lee & Raschke [13] extended these findings by demonstrating that authentic environmental engagement, as opposed to symbolic actions such as greenwashing, contributes meaningfully to stakeholder legitimacy and profitability. Zheng et al. [14] also confirmed that ESG practices are positively linked to firm value in China, although the governance dimension was not statistically significant in their model. Collectively, these studies suggest that ESG adoption contributes to reputational capital and financial efficiency, although the strength and composition of these effects may vary depending on firm size, risk profile, and ESG sub-dimensions.

2.2. Stakeholder Pressure and Mediating or Moderating Mechanisms

Literature has explored the mediating and moderating roles of stakeholder dynamics in the relationship between ESG and performance. Stakeholder pressure is widely recognized as a central driver of sustainable practice adoption. Empirical studies consistently demonstrate that stakeholder pressure is a critical force behind ESG adoption and disclosure. Several studies have emphasized that stakeholder pressure can amplify the financial returns of ESG engagement by enhancing legitimacy and visibility [15,16]. For instance, Adomako & Tran [17] demonstrated that stakeholder pressure moderates the positive relationship between environmental collaboration and responsible innovation, which subsequently affects firm performance.
Similarly, Esposito De Falco et al. [18] showed that trust-based relationships with stakeholders, particularly customers and local communities, drive ESG adoption and green innovation among SMEs. Furthermore, Zheng et al. [14] identified media attention and analyst coverage as mediating mechanisms through which ESG activities influence firm valuation. In emerging market contexts, Alessa et al. [19] found that stakeholder pressures, moderated by green technological innovation, significantly affect ESG disclosure intensity. These studies underscore the critical importance of stakeholder ecosystems in shaping both the formulation and impact of ESG strategies.

2.3. Sector Specific Insights

The literature is focused on sector-specific dynamics and the differentiated effects of ESG based on industry characteristics. Matakanye et al. [20] reported that companies in environmentally sensitive industries such as manufacturing and mining are subject to stronger stakeholder pressures and thus tend to prioritize environmental performance in their ESG strategies. Similarly, Wolf [21] found that stakeholder pressure interacts with sustainable supply chain management to influence corporate sustainability performance. Zheng et al. [14] further observed that the positive effects of ESG on firm value are concentrated in low-pollution industries, while Alessa et al. [19] highlighted the importance of contextual stakeholder demands in shaping ESG reporting in Ghana’s mining and manufacturing sectors. These findings suggest that the relationship between ESG and performance is not universally applicable but is mediated by industry-specific pressures, regulatory environments, and stakeholder salience.

2.4. Research Questions

Although existing literature provides valuable insights into the relationship between ESG practices and financial performance, several limitations remain across three major streams of research. First, studies examining the direct effects of ESG often treat ESG as an aggregate construct, overlooking the potentially divergent impacts of environmental, social, and governance dimensions. This approach limits understanding of how specific ESG components drives financial outcomes. This study addresses this gap by disaggregating ESG into its constituent dimensions.
Second, while prior research has acknowledged stakeholder dynamics as meaningful moderators or mediators in the relationship between ESG and performance, most studies have conceptualized stakeholder influence in general terms, without differentiating its role across specific ESG dimensions. This aggregation masks potential heterogeneity in how stakeholder pressure channels the effects of environmental, social, and governance initiatives into financial outcomes. This study addresses this gap by empirically modeling stakeholder pressure as a dimension-contingent mechanism, thereby enabling a more granular understanding of how stakeholder engagement may function differently across ESG domains in shaping firm performance.
Third, studies focusing on sector-specific dynamics have primarily examined ESG strategies within manufacturing industries. Consequently, industries with high service intensity and supply chain complexity, such as logistics, remain underrepresented in empirical research. By focusing on Korean logistics firms, this study extends the literature on the relationship between ESG and performance to a new industrial context, offering sector-specific insights into how stakeholder pressure and ESG dimensions interact under unique institutional and operational conditions.
These combined gaps underscore the need for a more nuanced, disaggregated, and context-aware analysis of ESG effectiveness. Accordingly, this study aims to advance theoretical understanding and practical relevance by jointly modeling dimension-specific ESG mechanisms and the mediating role of stakeholder pressure in the logistics sector.
To address these gaps, this study develops a disaggregated model that examines the unique effects of each ESG dimension on financial performance and investigates whether stakeholder pressure serves as a mediating pathway in these relationships. Three key questions emerge from this theoretical framework:
RQ1. How do the three dimensions of ESG activities differentially impact the financial performance of logistics firms in Korea?
RQ2. Does stakeholder pressure mediate the relationship between each ESG dimension and financial performance in the logistics sector?
RQ3. Which ESG dimensions have a direct effect on financial performance, and which ones influence it indirectly through stakeholder pressure?

3. Hypothesis Development and Research Model

3.1. ESG Activities and Financial Performance

ESG practices have transformed corporate strategies by shifting the emphasis from profit maximization to broader objectives, including environmental protection, social responsibility, and sound corporate governance. Firms that adopt ESG principles tend to exhibit a heightened awareness of sustainability, fostering innovative and socially responsible business practices [5]. As public awareness of sustainability rises, integrating non-financial dimensions into corporate strategy has become increasingly essential for generating long-term financial value [22,23].
Environmental initiatives within firms can reduce inefficiency-related costs while enhancing the ability to identify and capitalize on emerging business opportunities [24]. Zhang & Lucey [25] found that ESG performance has a positive impact on corporate outcomes, including improved access to external financing, strengthened corporate creditworthiness, and enhanced operational and financial performance. Similarly, Agoraki et al. [26] suggest that effective management of ESG-related reputational risk is associated with lower financial constraints and improved corporate performance. A growing body of literature further supports the positive association between ESG engagement and financial performance [27,28,29]. Based on the findings, this study proposes the following research hypotheses:
H1. 
Environmental (E) activities undertaken as part of ESG initiatives will positively affect the financial performance of logistics firms.
H2. 
Social (S) activities undertaken as part of ESG initiatives will positively affect the financial performance of logistics firms.
H3. 
Governance (G) activities undertaken as part of ESG initiatives will positively affect the financial performance of logistics firms.

3.2. The Mediating Role of Stakeholder Pressure

Stakeholders are conceptualized as individuals or groups that can influence or be impacted by an organization’s objectives [30]. Traditionally, the stakeholder perspective was primarily confined to shareholders and employees; however, within the broader framework of corporate social responsibility, this scope has been considerably extended. It now encompasses both internal stakeholders, such as shareholders and employees, and external stakeholders, including suppliers, customers, governmental agencies, and society [31]. Consequently, organizations are required to adopt a holistic approach to stakeholder engagement when advancing ESG initiatives, ensuring active consideration of internal actors and external environmental forces that influence corporate behavior.
Firms engage in business activities to generate stakeholder value [32]. Stakeholders are not passive recipients of corporate decisions but rather possess varied motivations to be actively involved in value creation and exchange processes that are integral to key business operations [33,34,35,36]. From a resource dependence perspective, firms must maintain relationships with stakeholders to secure the essential resources necessary for sustaining their operations [37].
As ESG issues become increasingly central to corporate sustainability [38], stakeholder influence over a company’s ESG activities becomes more evident. In this context, prior studies have highlighted the significant role of stakeholder pressure in shaping corporate environmental strategies. For instance, Sarkis et al. [39] examined how stakeholder groups, including customers, governments, investors, and civic organizations, affect the selection of environmentally responsible practices, emphasizing the role of training as a complementary component. Koelbel & Busch [40] found that stakeholder pressure statistically significantly influences the relationship between ESG performance and corporate risk. Similarly, Lokuwaduge & Heenetigala [41] identified stakeholder pressure as a key motivator of ESG practices in the Australian mining sector. Numerous other studies support the conclusion that stakeholder pressure is a critical factor driving ESG engagement [42,43]. Drawing on the findings of these studies, this research posits the following hypotheses:
H4. 
Stakeholder pressure mediates the relationship between environmental (E) activities and financial performance in logistics firms.
H5. 
Stakeholder pressure mediates the relationship between social (S) activities and financial performance in logistics firms.
H6. 
Stakeholder pressure mediates the relationship between governance (G) activities and financial performance in logistics firms.

3.3. Research Model

ESG is often regarded as a comprehensive framework; however, its three components, environment, social, and governance, represent distinct and autonomous domains. In this study, separate analytical models are developed for each ESG dimension to systematically assess their impacts on the financial performance of logistics firms. This approach facilitates an understanding of how each ESG component independently influences financial outcomes and examines the mediating effect of stakeholder pressure within each domain-specific context. Building upon a foundational structural equation model, independent models are utilized to evaluate the effects of each ESG dimension separately. As illustrated in Figure 1, the proposed research model outlines the hypothesized relationships among ESG activities, stakeholder pressure, and financial performance.

4. Research Methodology

4.1. Research Instrument and Sampling

A survey-based methodology was employed to evaluate the proposed research model. The sample mainly comprised logistics firms certified under the Certified Excellent Logistics Companies (CELC) program, an initiative promoted by the Korean government to recognize firms delivering exemplary logistics services.
Within the Korean context, the integration of ESG principles in the logistics sector has been predominantly observed among industry leaders. This limited dissemination highlights the need for empirical research into CELC-affiliated logistics firms that have started implementing ESG-oriented practices.
We employed an electronic survey instrument to gather data. Prior to distribution, the questionnaire and underlying conceptual model were pretested with five logistics practitioners and three logistics researchers, all of whom had more than 10 years of experience. The questionnaire for survey is presented in Appendix A.
To ensure functionally diverse and experiential insights, a purposive sampling strategy targeting specific roles was adopted. Each participating firm was requested to nominate three senior professionals from the ESG, strategic planning, and finance departments, with each nominee having a minimum of five years of experience in their respective functional areas.
Following refinement for clarity and comprehensibility, the survey was launched. The data collection period spanned from 13 to 30 April 2024. Participants were required to have a minimum of five years’ experience in the logistics field for ESG, strategy, or finance. A total of 300 responses were collected, of which 256 were deemed valid and used for analysis. The overall response rate was approximately 93%, based on 324 distributed survey invitations.

4.2. Measures

To ensure consistency and comparability in the delineation of ESG dimensions, this study examined ESG reports from leading Korean logistics firms, selecting only those activities uniformly implemented across all sampled entities. This methodological approach was adopted to address the inherent complexity and interpretative variability associated with ESG data, which often diverge significantly in scope and format depending on each firm’s reporting practices [44].
Based on this analysis, environmental activities were systematically categorized into three principal domains: the reduction and management of greenhouse gas (GHG) emissions [45,46,47], mitigation of environmental impacts [11,48], and the implementation of comprehensive waste management strategies [49]. Social initiatives encompassed the promotion of stable labor-management relations [11,50], an emphasis on human rights and safety standards [48,51], and efforts aimed at fostering mutual growth with partner organizations [50,52,53]. Governance-related measures included strengthening corporate governance frameworks [54,55], adopting ethical management practices [11,56], and establishing robust legal compliance mechanisms to ensure transparency and accountability [48,57].
Stakeholder pressure was operationalized through three primary groups, customers, investors, and local communities, which are recognized as principal influencers of corporate ESG behavior [30,58]. Financial performance was evaluated using indicators such as operating profit, revenue growth, and cash flow improvements, which are frequently utilized in empirical research assessing the financial impacts of ESG initiatives [10,59]. All questionnaire items were rated on a seven-point Likert scale, ranging from “strongly agree” to “strongly disagree.” The proposed model was assessed using structural equation modeling (SEM) with IBM SPSS AMOS 29.0 to confirm both the measurement and structural components.

5. Analysis and Results

5.1. Reliability and Validity Analysis

The evaluation of measurement reliability and validity is crucial to ensuring the robustness of structural equation modeling (SEM). Reliability refers to the consistency of a measurement instrument in generating stable results under consistent conditions. In SEM, internal consistency is typically assessed using Cronbach’s alpha (α) and Composite Reliability (CR). A Cronbach’s α value of 0.70 or higher is generally considered indicative of satisfactory reliability, reflecting uniform responses across items within a construct. Similarly, CR, which accounts for the varying contributions of individual indicators, suggests acceptable reliability at thresholds above 0.70.
Validity, conversely, pertains to the extent to which an instrument accurately measures the theoretical construct of interest, commonly evaluated through convergent and discriminant validity. Convergent validity is demonstrated when indicators of the same latent construct show strong correlations, often indicated by an Average Variance Extracted (AVE) value exceeding 0.50. Discriminant validity is established when the square root of a construct’s AVE exceeds its correlations with other constructs, thereby ensuring discriminant property [60]. Following established conventions, measurement model validity was evaluated at the 1% significance level (p < 0.01).
To assess the potential for common method bias, Harman’s single-factor test was performed prior to confirmatory factor analysis, using an unrotated exploratory factor solution. Since the ESG dimensions were measured using separate instruments, the test was performed independently for each of the three models (E, S, and G). The results revealed that no single factor accounted for the majority of the variance in any of the models, with the highest being 42.5%. These findings suggest that common method bias is unlikely to threaten the validity of the constructs measured [61].
The findings from the confirmatory factor analysis (CFA) and construct reliability evaluation of the ESG Environmental (E) model indicate robust measurement properties. Specifically, all factor loadings on the latent variables of Environmental Practices, Stakeholder Pressure, and Financial Performance were statistically significant at the p < 0.001 level. The Average Variance Extracted (AVE) values for each construct surpassed the recommended threshold of 0.50, demonstrating adequate convergent validity. Additionally, Composite Reliability (CR) scores exceeded the 0.60 benchmark, confirming satisfactory internal consistency among the measurement items. Collectively, these results substantiate the construct reliability and convergent validity of the ESG Environmental model. Table 1 presents the results of the reliability and validity analysis for the environmental model.
The results of the confirmatory factor analysis (CFA) and construct reliability assessment for the ESG Social (S) model demonstrated that all path coefficients from the latent constructs, namely Social Practices, Stakeholder Pressure, and Financial Performance, to their respective observed indicators were statistically significant at the 0.001 level. Consistent with the criteria proposed by Fornell and Larcker [60], an Average Variance Extracted (AVE) value of 0.50 or above is considered acceptable; however, AVE values marginally below this threshold may still be acceptable if the corresponding Composite Reliability (CR) exceeds 0.60. In this study, all AVE values met these criteria. Furthermore, CR values for all constructs surpassed the 0.60 benchmark, indicating satisfactory internal consistency among the measurement items. Collectively, these findings affirm the construct reliability and convergent validity of the ESG Social (S) model. Table 2 presents the results of the reliability and validity analysis for the social model.
The confirmatory factor analysis (CFA) and construct reliability assessment for the ESG Governance (G) model demonstrated that all factor loadings from the latent constructs, namely Governance Practices, Stakeholder Pressure, and Financial Performance, to their respective observed indicators were statistically significant at the 0.001 level. Consistent with the criteria outlined by Fornell and Larcker [60], an Average Variance Extracted (AVE) of 0.50 or higher is indicative of adequate convergent validity; however, AVE values marginally below this threshold may still be deemed acceptable if the Composite Reliability (CR) exceeds 0.60. In this study, all AVE values fell within an acceptable range, and all CR values surpassed the minimum threshold of 0.60, indicating sufficient internal consistency among measurement items. Collectively, these findings support the construct reliability and convergent validity of the ESG Governance model. Table 3 presents the results of the reliability and validity analysis for the governance model.

5.2. Model Fit Analysis

Absolute fit indices are employed to evaluate how effectively a specified model reproduces the observed data, independent of comparative models. These indices offer a direct assessment of the overall model fit. The indices include the chi-square statistic divided by degrees of freedom (χ2/df) and the Root Mean Square Error of Approximation (RMSEA). In contrast, incremental fit indices compare the proposed model’s performance against a baseline or null model, providing a relative measure of model adequacy. The indices include the Tucker–Lewis Index (TLI) and the Comparative Fit Index (CFI).
The model fit indices for the ESG environmental dimension (Model 1) indicated an acceptable fit, with χ2 = 47.38, TLI = 0.974, CFI = 0.983, and RMSEA = 0.062. Similarly, the social dimension model (Model 2) demonstrated good fit, with χ2 = 40.099, TLI = 0.983, CFI = 0.988, and RMSEA = 0.051. The governance dimension (Model 3) also exhibited satisfactory fit indices, with χ2 = 59.866, TLI = 0.953, CFI = 0.969, and RMSEA = 0.077. These findings collectively suggest that the measurement models for the Environmental, Social, and Governance constructs exhibit adequate fit with the observed data, thereby supporting the validity of the employed factor structures. Table 4 presents the results of the model fit analysis.

5.3. Path and Mediation Analysis

The structural analysis conducted to evaluate the direct effects of ESG activities on financial performance was assessed more stringently at the 0.1% significance level (p < 0.001) to ensure robust interpretation of the hypothesized effects.
It reveals that only socially related ESG practices demonstrate a statistically significant impact. Conversely, environmental and governance activities do not exhibit significant direct effects within the context of logistics firms. Specifically, social practices are positively correlated with financial outcomes, highlighting their importance. The social dimension encompasses initiatives related to labor-management relations, occupational safety, and shared growth with business partners, areas typically governed by rigorous regulatory frameworks in Korea. These domains have undergone increased institutionalization through legal mandates and heightened societal expectations, compelling logistics firms to establish comprehensive internal compliance systems. Non-compliance with these regulations often results in legal sanctions and financial penalties, thereby risking operational continuity.
Therefore, adherence to social ESG requirements not only mitigates financial risks but also fosters business stability. Overall, these findings suggest that, among the three ESG dimensions, social practices have the most direct and substantial impact on the financial performance of logistics firms. Table 5 presents the results of the direct path analysis.
To investigate the mediating effect of stakeholder pressure on the relationship between ESG practices and financial performance, a bias-corrected bootstrap method was utilized. The mediation was evaluated through the estimated indirect effect, standard error (S.E.), and 95% confidence intervals (CI). In this approach, the statistical significance of a mediation effect is determined by whether the confidence interval excludes zero, rather than relying on p-values.
In the context of the environmental (E) dimension, the analysis revealed a statistically significant indirect effect of stakeholder pressure, with a 95% confidence interval (CI) ranging from 0.131 to 0.497, excluding zero. This finding indicates a meaningful mediating role of stakeholder pressure. Considering that environmental initiatives, particularly those targeting greenhouse gas (GHG) emissions reduction and management, are not yet subjected to comprehensive legal mandates or stringent regulations within the logistics sector, external pressures exerted by stakeholders, such as customers and investors, may be instrumental in translating environmental ESG practices into tangible financial performance outcomes. Consequently, stakeholder pressure emerges as a full mediator in the relationship between environmental ESG practices and financial performance.
In the context of the social (S) dimension, the indirect effect of stakeholder pressure was also statistically significant, with a 95% confidence interval ranging from 0.039 to 0.242, excluding zero. Furthermore, social ESG practices were found to exert a direct and significant influence on financial performance, suggesting a partial mediating role for stakeholder pressure. Social practices, including labor relations, occupational safety, and shared growth, are highly regulated in Korea, requiring logistics firms to adhere to legal standards to maintain business continuity. Consequently, stakeholder pressure in the social domain complements regulatory compliance, further reinforcing positive financial outcomes. Overall, stakeholder pressure functions as a partial mediator in the relationship between social ESG practices and financial performance.
For the governance (G) dimension, the mediation analysis revealed a statistically significant indirect effect of stakeholder pressure, with a 95% confidence interval (CI) ranging from 0.140 to 0.566, excluding zero. Governance practices, including efforts to enhance board transparency, ethical standards, and shareholder protection, are primarily internal strategic initiatives aimed at strengthening corporate integrity. In this context, stakeholder pressure, particularly from investors and institutional actors, serves as a critical mechanism for translating governance efforts into improved financial outcomes. Consequently, stakeholder pressure fully mediates the relationship between governance-related ESG practices and financial performance in logistics firms.
Table 6 presents the results of the mediating path analysis. Figure 2 illustrates the complete structural equation model, capturing all hypothesized pathways, including the direct effects of ESG dimensions on financial performance and the mediating role of stakeholder pressure. This integrated model provides a comprehensive overview of the relationships tested in the study.

6. Discussion

The analysis of direct effects provides nuanced insights into the differential impact of ESG activities on the financial performance of logistics firms. Notably, among the three ESG dimensions, only socially related practices exhibited a statistically significant and positive relationship with financial performance (β = 0.515, p < 0.001), thereby supporting Hypothesis 2 (H2). This result corroborates the existing literature, which emphasizes the financial materiality of social performance, particularly within labor-intensive industries subject to substantial regulatory oversight [62]. Social ESG initiatives encompassing labor relations, safety management, and co-prosperity projects are often integral to legal compliance and operational stability, which in turn can enhance cost efficiency and bolster brand reputation [63].
In contrast, the direct effects of environmental and governance-related practices on financial performance were not statistically significant, resulting in the rejection of hypotheses 1 (H1) and 3 (H3). While environmental initiatives, such as greenhouse gas (GHG) emission reductions, are increasingly recognized and valued by stakeholders, they may not produce immediate financial benefits unless supported by appropriate regulatory frameworks or substantial stakeholder pressure [64]. Similarly, governance improvements, although critical for ensuring long-term sustainability and mitigating risks, tend to influence financial outcomes more subtly and over longer time horizons, particularly within non-financial sectors such as logistics [65].
This pattern may partially reflect the time-lagged nature of benefits associated with environmental and governance practices. Such initiatives often require extended implementation periods to produce measurable financial outcomes due to their reliance on structural reforms, certification processes, and gradual institutional adaptation. Accordingly, the lack of statistically significant direct effects in this study should not be interpreted as evidence of ineffectiveness. Rather, it suggests that longitudinal research designs may be necessary to fully capture their financial implications.
These findings indicate that, within the context of Korean logistics firms, ESG strategies emphasizing social responsibility may yield more immediate financial benefits compared to environmental or governance initiatives. This phenomenon may be attributable to the relatively stringent legal enforcement and societal expectations regarding labor rights and safety standards in Korea. Consequently, firms that actively implement social ESG practices are potentially better positioned to enhance stakeholder trust and ensure operational continuity, thereby translating these efforts into improved financial performance.
In addition to the direct effects, the mediation analysis underscores the pivotal role of stakeholder pressure in elucidating the mechanism through which ESG practices influence financial performance. As presented in Table 6, stakeholder pressure significantly mediates the relationship between environmental and governance practices and financial outcomes, evidenced by 95% bias-corrected confidence intervals that exclude zero (p < 0.01). These findings empirically substantiate the full mediation effect of stakeholder pressure within both environmental (B = 0.272, 95% CI = 0.131–0.497) and governance (B = 0.302, 95% CI = 0.140–0.566) models.
This finding corroborates stakeholder theory, which suggests that external stakeholder demands, such as those from customers, investors, and regulatory agencies, can facilitate the translation of non-financial ESG initiatives into measurable financial performance. This relationship is particularly salient in sectors where regulatory frameworks and market pressures are still nascent or insufficiently institutionalized [66,67]. Specifically, in the context of environmental ESG practices, where legal enforcement mechanisms remain relatively weak, stakeholder exertion of pressure acts as a pivotal mechanism that incentivizes firms to engage in environmentally responsible behaviors, thereby potentially enhancing corporate reputation and stakeholder trust [68,69,70].
In terms of the social dimension, the mediating role of stakeholder pressure was statistically significant (B = 0.111, 95% CI = 0.039–0.242). The significance of both the direct and indirect effects indicate partial mediation. This finding suggests that social practices within logistics firms not only fulfill external stakeholder expectations but also exert a direct influence on financial performance through adherence to labor laws and safety standards. These dual pathways exemplify the interplay between institutional pressures and performance-driven incentives characteristic of the social aspect of ESG frameworks.

7. Implications

7.1. Theoretical Implications

This study advances the existing ESG literature by providing nuanced theoretical insights into the differential impacts of ESG dimensions on firm performance within the logistics sector. Notably, the analysis reveals that only social ESG practices demonstrate a significant direct effect on financial performance, thereby emphasizing the non-uniform materiality of ESG components and their context-dependent influences [71]. These findings align with stakeholder theory arguments that highlight the heightened importance of social legitimacy and labor compliance in labor-intensive industries, such as logistics, where regulatory oversight is stringent and stakeholder scrutiny is substantial [72].
Second, the comprehensive mediating role of stakeholder pressure in environmental and governance domains highlights the critical importance of external stakeholder engagement as a mechanism through which ESG initiatives translate into substantive performance outcomes. This finding empirically extends prior research by demonstrating that stakeholder alignment is fundamental for ESG practices, particularly those lacking legal mandates to engender tangible economic value [67,69]. Furthermore, the mediating effect underscores the relevance of institutional theory within ESG scholarship, suggesting that organizational behavior in environmental and governance aspects may be predominantly shaped by normative and mimetic pressures rather than solely by internal strategic considerations [63,73].
Third, the partial mediation observed within the social dimension delineates the dual pathways through which social ESG practices impact financial performance: firstly, directly via regulatory compliance; and secondly, internally through enhanced labor relations and employee engagement. This finding corroborates prior research indicating that social ESG initiatives often embody a combination of institutional isomorphism and value creation strategies, particularly in sectors characterized by reputational and operational risks [73,74].
Collectively, these findings contribute to the advancement of ESG theory by emphasizing the importance of going beyond aggregate ESG indices. They emphasize the need to examine the distinct pathways and mechanisms through which each ESG pillar impacts firm-level outcomes. Future research should aim to disentangle these mechanisms across various sectors and institutional contexts to develop a more nuanced understanding of the relationships between ESG performance and organizational performance.

7.2. Managerial Implications

The findings of this study offer several practical implications for managers and decision-makers in the logistics industry seeking to leverage ESG strategies for enhanced financial performance.
First, the substantial direct and indirect impacts of social ESG practices underscore the necessity for logistics firms to prioritize social responsibility initiatives, such as enhancing labor-management relations, improving occupational safety, and fostering co-growth with business partners. These practices are not solely driven by compliance but are also intrinsically linked to operational continuity and the cultivation of reputational capital. Recent empirical research has demonstrated that proactive engagement in social ESG domains can enhance organizational resilience and increase employee productivity, particularly in highly regulated environments [67,74,75]. Accordingly, managers should regard social ESG investment as a strategic lever that creates value beyond mere regulatory adherence.
Second, the full mediating role of stakeholder pressure across both environmental and governance domains highlights the critical importance of strategic stakeholder relationship management. ESG initiatives in these domains are unlikely to generate tangible financial benefits unless logistics firms align practices with stakeholder expectations, including those of customers, investors, and local communities. Recent scholarly work corroborates that mechanisms for stakeholder engagement, such as ESG transparency, dialog platforms, and co-creation processes, are crucial for enhancing the effectiveness of ESG [67,69].
In this regard, stakeholder engagement must transcend conventional disclosure practices to incorporate sustained, bidirectional communication mechanisms that systematically integrate stakeholder input into both ESG strategy formulation and implementation processes. Specifically, logistics firms can establish dedicated stakeholder panels or roundtables to facilitate structured dialog with key constituents, collaboratively develop comprehensive ESG roadmaps with primary supply chain partners, and systematically incorporate stakeholder feedback into ESG performance indicators. Furthermore, cultivating long-term ESG partnerships with internal and external stakeholders serves to institutionalize collaborative practices, enhance strategic alignment, and strengthen the organizational legitimacy of ESG initiatives.
Third, the absence of significant direct effects within the environmental and governance domains highlights the need for a more strategic and long-term approach to ESG integration. Although these domains may not yield immediate financial benefits, they contribute to enhancing institutional legitimacy and mitigating future regulatory and reputational risks [76,77,78]. Accordingly, managers should integrate ESG considerations into their long-term risk management and value creation frameworks. Managers should recognize the potential for diminishing marginal returns from excessive stakeholder compliance. When ESG activities become predominantly driven by external expectations rather than strategic conviction, organizations may experience deinstitutionalization, a phenomenon whereby repeated stakeholder appeasement weakens intrinsic motivation for organizational innovation and displaces established logics with symbolic conformity [79]. This dynamic can lead to a greenwashing trap, where symbolic compliance takes precedence over substantive transformation.
Effective stakeholder engagement requires balancing external responsiveness with strategic autonomy, ensuring ESG implementation remains purpose-driven rather than purely reactive. This necessitates developing internal ESG capabilities, fostering organizational culture change, and establishing innovation-oriented objectives that transcend regulatory compliance. Future research employing longitudinal or threshold-based methodologies could identify critical inflection points where stakeholder pressure yields diminishing returns, thereby informing optimal ESG engagement strategies.
Finally, the differential impacts across various ESG dimensions underscore the limitations of adopting a universal, ‘one-size-fits-all’ approach to ESG implementation. Firms must develop dimensionally tailored and contextually responsive ESG strategies that align not only with the unique characteristics of their respective sectors and stakeholder ecosystems, but also with their internal resource capabilities and the maturity of their institutional environments. ESG adoption should be conceptualized as a phased developmental process, wherein firms sequentially implement environmental, social, and governance initiatives based on their operational readiness and strategic priorities. Furthermore, given the heterogeneous legal and regulatory expectations across jurisdictions, firms should prioritize ESG domains in accordance with the institutional logics and compliance requirements of their operating environments. Such tailored and phased integration not only enhances the credibility and legitimacy of ESG initiatives but also optimizes resource allocation efficiency, thereby contributing to more effective and sustainable organizational practices.

8. Conclusions, Limitations and Future Research Directions

8.1. Conclusions

This study examined the relationship between ESG activities and financial performance in the logistics industry, with a focus on the mediating role of stakeholder pressure. Using structural equation modeling and bootstrapping methods, the analysis showed that among the three ESG dimensions, only social practices had a significant direct impact on financial performance. Conversely, environmental and governance practices did not have significant direct effects, but both influenced financial results indirectly through stakeholder pressure. These findings underscore the importance of stakeholder alignment in enhancing the financial relevance of ESG strategies, particularly in environments where regulatory requirements are weak or still evolving.
The different impacts observed across ESG areas suggest that firms should adopt a strategic and tailored approach to ESG implementation, rather than relying on a broad or symbolic strategy. Social ESG efforts appear to yield quicker financial returns, likely due to more stringent institutional enforcement and heightened societal expectations. In contrast, the environmental and governance areas require active stakeholder engagement to turn ESG investments into financial gains, highlighting the importance of external legitimacy and transparency.
Overall, this study advances ESG literature by providing a more detailed understanding of how stakeholder interactions influence ESG efforts and their impact on firm-level financial results. The findings provide practical insights for logistics firms, especially in emerging markets, and highlight the importance of incorporating stakeholder responsiveness into ESG strategy development. Future research could expand on these findings by examining differences across industries, long-term effects, and how institutional infrastructure shapes the connection between ESG and performance.

8.2. Limitations and Future Research Directions

Several limitations of this study should be acknowledged. First, the empirical analysis is based solely on survey data collected from logistics firms operating in Republic of Korea. While this may constrain the generalizability of findings to other national contexts, the Korean logistics sector presents a particularly relevant setting for investigating ESG effectiveness. Although ESG awareness is growing and regulatory discourse is evolving, ESG implementation in logistics remains relatively nascent. This gap between institutional pressure and actual practice provides a meaningful analytical context and may reflect conditions in other economies that are similarly transitioning toward ESG integration. Therefore, while caution is warranted in extrapolating the results, the insights generated may offer valuable implications for logistics industries in countries with comparable levels of ESG maturity.
Second, the study employed a purposive sampling strategy targeting ESG-experienced professionals within firms certified under the Certified Excellent Logistics Company (CELC) program, which may have introduced a sample bias toward early ESG adopters. Although this design enhances the internal validity of ESG relevance, it may limit the representativeness of the broader logistics population. Additionally, while role-based diversity was ensured (ESG, strategy, and finance functions), firm-level control variables, including firm size, age, market share, or industry segment, were not included in the analysis. This omission limits the ability to isolate the specific effects of ESG activities beyond firm structural characteristics.
Third, external environmental factors such as regulatory pressure, market competition, which could significantly moderate the ESG and financial performance relationship, were also excluded due to data limitations. We recognize that such contextual variables are important for a holistic understanding of ESG impacts and recommend their inclusion in future research through multilevel or panel-data designs.
Fourth, this study uses a cross-sectional survey design, which restricts the ability to capture the dynamic and time-lagged effects of ESG initiatives. ESG strategies often require long-term commitment and may yield financial benefits only after a certain latency period. Future studies should consider adopting longitudinal or time-series approaches to more accurately assess causal pathways and delayed performance outcomes.
Addressing these limitations would not only strengthen the theoretical rigor in understanding ESG-performance linkages but also offer more robust managerial and policy insights for organizations operating under evolving institutional and market conditions.

Author Contributions

Conceptualization, J.N. and D.K.; methodology, A.Y.C. and D.K.; formal analysis, A.Y.C. and D.K.; investigation, J.N. and D.K.; writing—original draft preparation, A.Y.C. and D.K.; writing—review and editing, J.N. and D.K.; supervision, J.N. and D.K. All authors have read and agreed to the published version of the manuscript.

Funding

This research is supported by Korea Transport Institute (PR. 21-24-010) and a Korea University grant.

Institutional Review Board Statement

In accordance with the Bioethics and Safety Act of the Republic of Korea (Article 2(2) and Article 15(2)), anonymous, minimal-risk, and non-interventional survey studies are exempt from Institutional Review Board (IRB) approval; therefore, this study did not require formal ethics committee review. The research was conducted in accordance with the principles of the Declaration of Helsinki (1975, revised in 2013).

Informed Consent Statement

Informed consent for participation was obtained from all subjects involved in the study.

Data Availability Statement

The data presented in this study are available on request from the corresponding author.

Conflicts of Interest

The authors declare no conflicts of interest.

Appendix A

Table A1. Questionnaire 1: (E) Environmental part.
Table A1. Questionnaire 1: (E) Environmental part.
ConstructItem Indicators
(EA)
Environment Activity		Please indicate the level of your company’s engagement in the following environmental practices.
EA1Greenhouse gas reduction
EA2Environmental impact mitigation
EA3Waste management initiatives
(SP)
Stakeholder Pressure		Please indicate the level of stakeholder pressure in environmental practices
SP1Local community
SP2Customers
SP3Investors
(FP)
Financial Performance		Please indicate the level of financial performance improvement as environmental practices
SR1Operating profit
SR2Sales revenue
SR3Cash flow
Table A2. Questionnaire 2: (S) Social part.
Table A2. Questionnaire 2: (S) Social part.
ConstructItem Indicators
(SA)
Social Activity		Please indicate the level of your company’s engagement in the following social practices.
SA1The promotion of stable labor-management relations
SA2The improvement of human rights and safety standard
SA3Fostering mutual growth with partner organizations
(SP)
Stakeholder Pressure		Please indicate the level of stakeholder pressure in social practices
SP1Local community
SP2Customers
SP3Investors
(FP)
Financial Performance		Please indicate the level of financial performance improvement as social practices
SR1Operating profit
SR2Sales revenue
SR3Cash flow
Table A3. Questionnaire 3: (G) Governance part.
Table A3. Questionnaire 3: (G) Governance part.
ConstructItem Indicators
(GA)
Governance Activity		Please indicate the level of your company’s engagement in the following governance practices.
GA1Strengthening corporate governance framework
GA2Adopting ethical management practices
GA3Establishing robust legal compliance to ensure transparency
(SP)
Stakeholder Pressure		Please indicate the level of stakeholder pressure in governance practices
SP1Local community
SP2Customers
SP3Investors
(FP)
Financial Performance		Please indicate the level of financial performance improvement as governance practices
SR1Operating profit
SR2Sales revenue
SR3Cash flow

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Sustainability 17 08840 g001
Figure 1. Research Model.
Figure 1. Research Model.
Sustainability 17 08840 g001
Sustainability 17 08840 g002
Figure 2. Research Results.
Figure 2. Research Results.
Sustainability 17 08840 g002
Table 1. Reliability and Validity Analysis (1): Environmental Model.
Table 1. Reliability and Validity Analysis (1): Environmental Model.
Latent
Variable		Observed
Variable		EstimateS.E.C.R.AVECR
Bβ
EAGHG reduction10.755 0.620.83
Environmental impact
mitigation		1.1160.8610.09212.07 ***
Waste management initiatives1.0320.740.09311.138 ***
SPLocal Community10.675 0.5280.77
Customers1.2370.7420.1359.151 ***
Investors1.1620.7610.1269.239 ***
FPOperating profit10.909 0.8530.946
Sales revenue1.010.9330.04124.801 ***
Cash flow1.0610.9290.04324.53 ***
Note: *** p < 0.001. C.R. (Critical Ratio) is the test statistic used to assess the significance of each factor loading in the confirmatory factor analysis. AVE (Average Variance Extracted) measures the amount of variance captured by a latent construct relative to the variance due to measurement error. A value above 0.50 indicates acceptable convergent validity. CR (Composite Reliability) evaluates the internal consistency of observed variables representing a latent construct. A CR value of 0.70 or higher is considered acceptable.
Table 2. Reliability and Validity Analysis (2): Social Model.
Table 2. Reliability and Validity Analysis (2): Social Model.
Latent
Variable		Observed
Variable		EstimateS.E.C.R.AVECR
Bβ
SALabor relations10.797 0.7390.83
Human Rights and Safety 1.1870.9160.07416.017 ***
Mutual Growth1.1860.8620.07715.34 ***
SPLocal community10.614 0.4920.77
Customers1.3620.7880.1747.83 ***
Investors1.2120.6920.1567.787 ***
FPOperating profit10.922 0.8320.946
Sales revenue1.0050.9270.04124.477 ***
Cash flow0.990.8870.04522.2 ***
Note: *** p < 0.001. C.R. (Critical Ratio) is the test statistic used to assess the significance of each factor loading in the confirmatory factor analysis. AVE (Average Variance Extracted) measures the amount of variance captured by a latent construct relative to the variance due to measurement error. A value above 0.50 indicates acceptable convergent validity. CR (Composite Reliability) evaluates the internal consistency of observed variables representing a latent construct. A CR value of 0.70 or higher is considered acceptable.
Table 3. Reliability and Validity Analysis (3): Governance Model.
Table 3. Reliability and Validity Analysis (3): Governance Model.
Latent
Variable		Observed
Variable		EstimateS.E.C.R.AVECR
Bβ
GAStrengthening Governance Framework 10.81 0.6810.864
Ethical Management1.2670.9240.08714.55 ***
Legal compliance1.0540.730.08412.49 ***
SPLocal community10.704 0.4240.684
Customers1.1820.7220.1527.799 ***
Investors 0.7190.5060.1126.421 ***
FPOperating profit10.947 0.7660.907
Sales revenue0.9740.9030.04521.877 ***
Cash flow0.8110.7660.0516.148 ***
Note: *** p < 0.001. C.R. (Critical Ratio) is the test statistic used to assess the significance of each factor loading in the confirmatory factor analysis. AVE (Average Variance Extracted) measures the amount of variance captured by a latent construct relative to the variance due to measurement error. A value above 0.50 indicates acceptable convergent validity. CR (Composite Reliability) evaluates the internal consistency of observed variables representing a latent construct. A CR value of 0.70 or higher is considered acceptable.
Table 4. Model Fit Analysis Results.
Table 4. Model Fit Analysis Results.
Modelχ2TLICFIRMSEA
ValueCriteriaValueCriteriaValueCriteria
E47.380.974≥0.950.983≥0.900.062≤0.08
S40.0990.9830.9880.051
G59.8660.9530.9690.077
Note: TLI (Tucker–Lewis Index) reflects the model’s overall fit, with values above 0.95 indicating excellent model fit. CFI (Comparative Fit Index) assesses relative model fit, where values above 0.90 are considered acceptable and values above 0.95 are regarded as indicative of excellent fit. RMSEA (Root Mean Square Error of Approximation) indicates the approximation error in the model; values below 0.08 suggest acceptable fit.
Table 5. Direct Path Analysis Results.
Table 5. Direct Path Analysis Results.
ModelPathEstimateS.E.C.R.Results
Bβ
EEA → FP0.2160.3070.1222.524Rejected
SSA → FP0.4090.5150.0856.023 ***Supported
GGA → FP0.1360.1980.1051.881Rejected
Note: *** p < 0.001.
Table 6. Mediating Path Analysis Results.
Table 6. Mediating Path Analysis Results.
ModelPathEstimateS.E.95% CIResults
BLLCIULCI
EEA → SP → FP0.2720.0870.131~0.497Supported (Full)
SSA → SP → FP0.1110.0510.039~0.242Supported (Partially)
GGA → SP → FP0.3020.1120.140~0.566Supported (Full)
Note: Confidence Interval (CI) refers to the 95% bias-corrected bootstrap interval. Statistical significance is determined by whether interval between Low Level Confidence Interval (LLCI) and Upper Level Confidence Interval (ULCI) excludes zero.
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Choi, A.Y.; Kim, D.; Na, J. Disaggregating ESG Mechanisms: The Mediating Role of Stakeholder Pressure in the Financial Performance of Logistics Firms. Sustainability 2025, 17, 8840. https://doi.org/10.3390/su17198840

AMA Style

Choi AY, Kim D, Na J. Disaggregating ESG Mechanisms: The Mediating Role of Stakeholder Pressure in the Financial Performance of Logistics Firms. Sustainability. 2025; 17(19):8840. https://doi.org/10.3390/su17198840

Chicago/Turabian Style

Choi, A Young, Dohyun Kim, and Joonho Na. 2025. "Disaggregating ESG Mechanisms: The Mediating Role of Stakeholder Pressure in the Financial Performance of Logistics Firms" Sustainability 17, no. 19: 8840. https://doi.org/10.3390/su17198840

APA Style

Choi, A. Y., Kim, D., & Na, J. (2025). Disaggregating ESG Mechanisms: The Mediating Role of Stakeholder Pressure in the Financial Performance of Logistics Firms. Sustainability, 17(19), 8840. https://doi.org/10.3390/su17198840

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