The effects of environmental, social, and governance on intellectual capital and firm performance of companies in developing countries: A systematic literature review

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Abstract

Particularly in the framework of developing nations, the link between environmental, social, and governance (ESG) policies and company performance has attracted increasing interest. Though ESG is generally acknowledged as a driver of sustainable development and long-term value creation (Eccles et al., 2014). However, there is still a need to know how intellectual capital, more especially its human, relational, and structural elements, interacts with ESG projects to affect organisational outcomes. Using a systematic literature review (SLR) using Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) approach, this paper synthesises results from earlier studies on the intersection of ESG practices, intellectual capital, and corporate performance. The study emphasises how, when intellectual capital is closely matched with ESG initiatives, it can greatly improve company performance. Results imply that companies using intellectual capital in line with strong ESG policies can get better both financial and non-financial results, thus supporting sustainable development objectives. The paper concludes that companies trying to maximise the advantages of ESG investments must have an integrated management approach. These revelations add to the body of knowledge already in publication on sustainability and intellectual capital (Lei et al., 2025) and have pragmatic ramifications for managers and legislators in developing nations trying to support ethical and profitable corporate operations.

Keywords: Environmental, Social, Governance, ESG Practices, Intellectual Capital, Firm Performance, ESG Practices in Developing Countries, Sustainable Development

Authors’ individual contribution: Conceptualization — K.M.A.K.; Methodology — K.M.A.K. and H.M.I.; Investigation — U.H.A.K.; Resources — K.M.A.K. and H.M.I.; Writing — K.M.A.K.; Supervision — U.H.A.K.; Funding Acquisition — K.M.A.K. and H.M.I.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G0, G3, Q0, Q5

Received: 06.03.2025
Revised: 03.05.2025; 24.09.2025
Accepted: 17.10.2025
Published online: 22.10.2025

How to cite this paper: Khalil, K. M. A., Kohar, U. H. A., & Issa, H. M. (2025). The effects of environmental, social, and governance on intellectual capital and firm performance of companies in developing countries: A systematic literature review. Journal of Governance & Regulation, 14(4), 146–155. https://doi.org/10.22495/jgrv14i4art14