In the contemporary global economic landscape, Environmental, Social, and Governance (ESG) criteria have transcended their origins as niche ethical screening tools to become central pillars of corporate strategy and investment analysis. The fundamental question driving this shift is whether sustainability drives profitability. This paper provides a rigorous, comprehensive review of the empirical literature concerning the relationship between ESG performance and Corporate Financial Performance (CFP). Adopting a McKinsey-style analytical framework, this review synthesizes over two decades of academic research, meta-analyses, and industry reports. The consensus emerging from the data is robust: there is a predominantly positive, non-linear correlation between robust ESG practices and financial outperformance. However, this relationship is not uniform; it is mediated by industry materiality, geographic context, and the time horizon of measurement. Key findings include a non-negative relationship reported in approximately 90% of studies, risk mitigation benefits for high ESG performers, the materiality of ESG factors to specific industries, and ESG's role as a driver of operational efficiency, innovation, and talent retention. This paper concludes with strategic recommendations for C-suite executives and investors to integrate ESG into core value creation logic, moving beyond reporting to operational integration.

Yang Cen. Strategic Value Creation: A Comprehensive Review of the Relationship between ESG Performance and Corporate Financial Performance. Academic Journal of Business & Management (2026), Vol. 8, Issue 3: 88-97. https://doi.org/10.25236/AJBM.2026.080310.

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