The Impact of Supply Chain Controversies and Heterogeneity on ESG Performance

Growing stakeholder's focus on ESG performance compels companies to manage risks throughout their supply chains. While the extant research has examined internal controversy and financial performance, a few studies have investigated the impact of supplier issues on a 's ESG standing. Thus, to address this gap, we assess the impact of company and supplier controversies and heterogeneity on both overall and individual ESG scores by analyzing the data from Bloomberg and Refinitiv databases for the companies in the transportation and customer staples industries across North America, Europe, and Asia Pacific for the period of 2017 and 2022. This study contributed to advancing the research of ESG management by incorporating supply chain issues. Further, the findings offer valuable insights for managers to improve sustainability practices and supplier selection strategies, and optimize their supply chain structure for ESG goals.