International Journal of Scientific Research and Engineering Development

This paper investigates the strategic importance of Environmental, Social, and Governance (ESG) branding as a driver of corporate reputation and a crucial signal for investor perception in the contemporary global market. The objective is to define effective ESG branding, analyse its foundational theoretical mechanisms, and empirically synthesize the demonstrable link between strong ESG communication and financial resilience. Methodology: This study is primarily based on secondary research, utilizing a systematic literature review and case analysis of recent academic papers, high-level consulting reports, and industry data published between 2020 and 2025. Main Findings: Effective ESG branding, characterized by measurable outcomes, substantiated claims, and rigorous third-party assurance, functions as an inimitable strategic resource (Resource-Based View), enhancing legitimacy and reducing information asymmetry for investors (Signalling Theory). Empirical evidence demonstrates that strong ESG performance significantly bolsters financial performance 1 and that higher ESG risks lead to increased operational and compliance costs, negatively impacting cash flow and investor value creation.2 Implications: Organizations must strategically transition from voluntary, qualitative Corporate Social Responsibility (CSR) to institutionalized, quantitative ESG reporting to build robust reputation capital and attract responsible capital. Addressing core challenges, particularly poor data quality and the surge in sophisticated greenwashing 3 , is critical for sustaining investor confidence and leveraging ESG as a strategic differentiator rather than merely a compliance cost.