ESG Across Economies: A Comparative Review of Developed and Developing

Abstract

This study investigates the discourse of Environmental, Social, and Governance (ESG) practices in developed and developing economies through a systematic literature review (SLR). ESG has emerged as a critical framework for sustainable business practices, yet its adoption and interpretation vary significantly across institutional and economic contexts. The research draws on 20 peer-reviewed studies published between 2010 and 2025, systematically identified through leading academic databases, and synthesised using a narrative analysis approach guided by the PRISMA framework.

The findings reveal sharp contrasts in ESG discourse. In developed economies, ESG is institutionalised, standardised, and strategically embedded within corporate governance, driven by strong regulatory frameworks, investor activism, and stakeholder accountability. By contrast, ESG practices in developing economies are fragmented, externally influenced, and often symbolic, shaped by international investor demands, donor agencies, and global supply chain pressures. Comparative analysis highlights the risk of a two-tier ESG system, with developed economies setting global benchmarks while developing economies struggle to align due to institutional voids, compliance costs, and capacity constraints.

The study contributes to theory by applying stakeholder, legitimacy, and institutional perspectives to explain differences in ESG adoption and discourse. It offers practical implications for policymakers, investors, and corporations, emphasising the need for stronger regulatory frameworks, context-sensitive evaluation criteria, and strategic integration of ESG. Limitations are acknowledged, particularly the reliance on secondary data, while directions for future research include empirical case studies and longitudinal analysis of ESG adoption in developing contexts. The research concludes that ESG is not a universal framework but a context-dependent discourse, with both convergences and divergences shaping its global trajectory.