Sustainable by Ideology? The Influence of CEO Political Ideology and Ivy League Education on ESG (Environmental, Social, and Governance) Performance

Heubeck, Tim; Ahrens, Annina Article — Published Version Sustainable by Ideology? The Influence of CEO Political Ideology and Ivy League Education on ESG (Environmental, Social, and Governance) Performance Business Strategy and the Environment Provided in Cooperation with: John Wiley & Sons Suggested Citation: Heubeck, Tim; Ahrens, Annina (2025) : Sustainable by Ideology? The Influence of CEO Political Ideology and Ivy League Education on ESG (Environmental, Social, and Governance) Performance, Business Strategy and the Environment, ISSN 1099-0836, Wiley, Hoboken, NJ, Vol. 34, Iss. 4, pp. 4785-4810, https://doi.org/10.1002/bse.4212 This Version is available at: https://hdl.handle.net/10419/323896 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. http://creativecommons.org/licenses/by/4.0/ Business Strategy and the Environment, 2025; 34:4785–4810 https://doi.org/10.1002/bse.4212 4785 Business Strategy and the Environment RESEARCH ARTICLE OPEN ACCESS Sustainable by Ideology? The Influence of CEO Political Ideology and Ivy League Education on ESG (Environmental, Social, and Governance) Performance TimHeubeck | AnninaAhrens Chair of International Management, University of Bayreuth, Bayreuth,Germany Correspondence: Tim Heubeck ([email protected]) Received: 24 July 2024 | Revised: 12 December 2024 | Accepted: 8 February 2025 Funding: This study is supported by Project DEAL–enabled openaccess funding. No other funding was received to assist with the preparation of the manuscript. Keywords: CEO| elite education| ESG| Ivy League| political ideology| upper echelons theory ABSTRACT Building on upper echelons theory, this study posits that political ideology serves as a foundational factor influencing whether CEOs prioritize environmental, social, and governance (ESG) outcomes, whereas Ivy League education acts as a contextual factor that moderates this relationship. Analyzing data from S&P 900 manufacturing firms, the findings reveal that liberal CEOs enhance ESG performance—particularly in the social and governance pillars—in contrast to their conservative counterparts. CEO political ideology's effect on ESG performance does not depend on whether CEOs graduated from an Ivy League institution. Instead, Ivy League–educated CEOs directly deter ESG performance, possibly due to specific values, perspectives, and social connections shaped by their elite educational background. This study contributes to upper echelons theory by illuminating two critical microlevel factors—CEO political ideology and elite education—that shape firms' ESG strategy, offering valuable implications for boards and stakeholders when selecting and evaluating corporate leadership. 1 | Introduction Organizations and their strategic leadership face increasing pressure to balance shareholder interests with those of their stakeholders (Fatima and Elbanna2023; Reimer etal.2018). The Principles for Responsible Investment (PRI), initiated by the United Nations, promote a global shift toward more sustainable and responsible business practices, which significantly raised awareness among corporations to prioritize environmental, social, and governance (ESG) initiatives (Peng and Chen 2024). Heightened societal awareness and the benefits of ESG—including superior financial performance (Friede etal.2015; Velte2017), enhanced operational efficiency (Kao 2023), stronger governance (Peng and Chen2024), and reduced managerial misconduct (He etal.2022; Yuan etal.2022)—have led to the integration of ESG into corporate strategy (Sandberg etal.2023; Taglialatela etal.2023). With the growing emphasis on a stakeholdercentric view of the firm (Carroll1991; Freeman1984), research has begun to identify the factors driving firms' ESG strategies (Seow2025; Wernicke etal.2022). However, this literature stream primarily focuses on macrolevel factors facilitating ESG (Gillan etal.2021), such as institutional (e.g., C. Liu etal.2023; Wang etal.2023) and organizational factors (e.g., Drempetic etal.2020; Heubeck and Ahrens2024). Recent studies, however, have shifted attention to microlevel drivers, particularly the role of a firm's chief executive officer (CEO) (Seow2025; Wernicke etal.2022). These studies emphasize CEO characteristics and experiences, including reputational concerns (Cabreros et al. 2024), formative early experiences like childhood poverty (Liu etal.2024b), dynamic capabilities (Heubeck 2024b), or foreign experience (Liu etal.2024a), as key determinants influencing firms'ESG performance. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. © 2025 The Author(s). Business Strategy and the Environment published by ERP Environment and John Wiley & Sons Ltd. 4786 Business Strategy and the Environment, 2025 Building on upper echelons theory (Hambrick and Mason1984), we propose that CEOs' political ideology represents a significant antecedent of firms' ESG performance because it instills distinct value systems that influence ESGrelated decisions. According to upper echelons theory, the background characteristics of top executives shape their strategic decisions by infusing them with values, personalities, and experiences (Hambrick 2007; Hambrick and Mason 1984). Given the significant sway of CEOs over organizational decisionmaking (Quigley and Hambrick2015), their firm's strategy often reflects their preferences and values, particularly in complex and ambiguous contexts where personal predispositions play a critical role (Cannella and Holcomb2005; Hambrick2007). Although upper echelons research highlights the impact of CEOs' characteristics on organizational outcomes, it has been criticized for overrelying on visible traits like age or gender as proxies for psychological factors (Finkelstein etal.2009; Neely etal. 2020). Recent studies address this limitation by examining lessobservable characteristics, such as political ideology, as key predictors of CEO decisions and organizational outcomes (Jeong etal.2021; Semadeni etal.2022; Swigart etal.2020). Among these characteristics, political ideology is a particularly powerful predictor in shaping a CEO's identity, values, and behaviors (Chandler et al. 2023; Swigart et al. 2020). Research in political psychology demonstrates that political ideology profoundly impacts personal worldviews, affecting decisionmaking preferences (Jost et al. 2008, 2009). Liberal CEOs, whose political value systems emphasize communal values like human rights, environmental protection, and egalitarianism, are more likely to pursue ESG strategies (Jost and Amodio2012; Y. Kim2024b). Conversely, conservative CEOs, with a preference for maintaining the status quo and prioritizing shareholder capitalism, are less likely to implement ESG initiatives (Jost etal.2003; Weng and Yang2024; Wolman etal.2024). This theoretical presumption is also supported by anecdotal evidence, which attests to the effect of political ideology on ESG (e.g., Segal2023; Sorkin etal.2022). This study contributes to this growing body of research by exploring the distinctions between corporate social responsibility (CSR) and ESG frameworks. Although CSR emphasizes voluntary ethical practices and social initiatives, ESG provides measurable criteria across environmental, social, and governance dimensions, offering a more comprehensive evaluation of corporate sustainability and responsibility (Liu etal.2024b; Martiny etal.2024). Thus, ESG expands the traditional CSR construct by adding environmental and governance dimensions, which are crucial for understanding the impact of CEO political ideology on corporate strategy (Gillan et al. 2021; Huang 2021). Although there is evidence that CEOs with liberal political ideologies encourage CSR (e.g., Chin etal.2013; Jeong etal.2021), the role of CEO political ideology in connection to ESG remains underexplored.1 We extend upper echelons theory, particularly research on CEO political liberalism, by introducing CEO Ivy League education as a boundary condition moderating the relationship between political ideology and ESG outcomes (Miller etal.2015; Urquhart and Zhang2022). Ivy League education represents an elite educational experience that significantly enhances graduates' human and social capital (Miller etal.2015) and shapes their decisionmaking processes through ideological value systems (Mullen 2009). This educational background, linked to enhanced human capital and strategic aptitude (Bailey and Helfat2003; Heubeck2024a; Wally and Baum1994), is particularly relevant in the complex context of ESG strategy (Heubeck2024b). Although many US CEOs are Ivy League–educated (Moody2021; Whitler2019), this characteristic remains understudied in the context of ESG. Ivy League education could lead liberal CEOs to emphasize ESG further while potentially deterring conservative CEOs from prioritizing it. Therefore, our second research goal explores the moderating influence of elite education attained at Ivy League institutions on the relationship between CEO political ideology and ESG outcomes. We test our hypotheses using longitudinal data from a sample of US S&P 900 manufacturing firms. The US provides a compelling context for studying ESG strategy because—unlike regions with mandatory ESG disclosures, such as the UK, EU, or China (Busch 2023; Peng and Chen 2024)—its voluntary reporting environment allows us to examine the discretionary practices of firms. By revealing that CEO political ideology significantly impacts ESG performance—with a positive effect for liberal CEOs and an adverse effect for conservative CEOs—we contribute to upper echelons theory by bridging it with political psychology. Our findings demonstrate that behavioral consistency applies to political ideology in the realm of upper echelons theory, extending prior research by showing that CEOs' political ideologies not only influence CSR (e.g., Chin etal. 2013; Gupta et al. 2021) but also shape ESGrelated decisions. This insight enriches the political psychology literature within the upper echelons framework, a critical contribution given the increasing political polarization surrounding ESG (Armstrong 2023). Additionally, we provide nuance to upper echelons theory by revealing that CEO political ideology distinctly affects social and governance strategies but not environmental strategy. Thus, we illuminate ideologically driven variations across specific ESG pillars, which differ significantly in scope (Deng etal.2024; LSEG2023; Trahan and Jantz2023). Further, we advance the understanding of upper echelons theory by demonstrating that Ivy League education functions not as a boundary condition but as a background characteristic that directly influences CEOs' decisions in relation to ESG strategy. Specifically, we find that Ivy League–educated CEOs deter ESG outcomes, potentially due to prioritizing traditional business goals over ESG concerns. These findings underscore two distinct effect channels: the ideological channel, reflecting how political ideology affects ESG strategy, and the elite education channel, capturing how Ivy League education shapes CEO priorities regarding ESG strategy. Importantly, neither political ideology nor Ivy League education uniformly affect ESG outcomes across all pillars. These results, robust to endogeneity concerns, alternate measures, and sample definitions, provide critical theoretical and empirical insights into the nuanced mechanisms driving ESG strategy within the upper echelons framework. We begin by introducing the main theoretical framework that underpins this study, based on which we derive the two research 4787 hypotheses. Next, we outline our research methodology, detailing data collection and variable measurement procedures. Following this, we present the main regression results and conduct several additional tests to demonstrate the robustness of our findings. Finally, we discuss our results' theoretical and practical implications and outline future research directions. 2 | Theoretical Background and Hypothesis Development 2.1 | CEO Political Ideology and ESG Performance Upper echelons theory underscores the critical role of CEOs— as the primary architects of a firm's strategy and operations— in shaping corporate outcomes, emphasizing the profound influence of their psychological characteristics on decisionmaking (Finkelstein etal.2009; Hambrick2007; Hambrick and Mason 1984). Among these characteristics, political ideology has emerged as a powerful predictor of CEOs' decisionmaking preferences within the upper echelons literature (Chandler et al. 2023; Kashmiri and Mahajan 2017). Building on this conceptual framework, we propose that CEOs' background characteristics—specifically, political ideology—significantly influence a crucial and timely organizational outcome—specifically, ESG performance—due to CEOs' substantial power over organizational decisionmaking. Political ideology is a key determinant of psychological differences and a predictor of the values and beliefs that shape CEOs' decisionmaking (Swigart et al. 2020) and encompasses a set of firmly rooted beliefs about how society should be organized and governed (Erikson and Tedin2019; Jost etal.2009). Despite the multidimensionality of political ideology, the liberal–conservative spectrum is commonly used to categorize political views and predict behaviors (Graham etal.2009; Jost2006). In this sense, political ideology is not a strict liberal–conservative dichotomy but a system of values and beliefs that are socially constructed, with the liberal–conservative divide serving as a suitable framework (Swigart etal.2020). The political psychology literature consistently demonstrates that ideological orientation shapes attitudes toward change and ambiguity (Swigart et al. 2020). Liberals are generally more receptive to change and tolerant of uncertainties, whereas conservatives are inclined to maintain the status quo, seeking stability and avoiding uncertainty (Conover and Feldman1981; Giddens2013; Jost etal.2003). These psychological tendencies extend beyond the personal domain and continue to influence decisionmaking in the professional context, including corporate leadership (Cheng et al. 2024; Chin et al. 2013; Swigart etal.2020). Drawing on behavioral consistency theory, which suggests that individuals uphold stable core values across various contexts (Cain and McKeon2016; Cronqvist etal.2012), we argue that CEOs' political ideologies significantly shape not only their decisionmaking in the private context but also in the professional realm—especially concerning ESG strategy. Political beliefs are deeply ingrained and relatively stable over time (Bartels2002; Jost etal.2009). Therefore, CEOs' firmly anchored political beliefs may cause them to align their strategic choices with their political ideology (Gupta etal.2021; Weng etal.2023). This ideological divide is particularly relevant in the context of ESG strategy, which requires CEOs to navigate complex issues involving environmental sustainability, social responsibility, and governance transparency (Heubeck 2024b; Mahran and Elamer2024). High ESG scores can signal responsible business practices to stakeholders and lead to financial and nonfinancial benefits (MacNeil and Esser2022; Sandberg etal.2023). We propose that ideological differences in openness, egalitarianism, and views on inequality further underscore how liberal and conservative CEOs approach ESG strategy. Conservative CEOs may perceive ESG as a threat to traditional business practices (Graham etal.2009; Swigart etal.2020), viewing it as an unnecessary or even harmful departure from their primary responsibility to shareholders. Liberal CEOs, conversely, due to their openness to change and egalitarian values (Jiang etal.2018; Jost etal.2003), are likely to see ESG as an opportunity to drive societal progress and embrace longterm sustainability. Specifically, we propose that liberal CEOs are more inclined to embrace change, perceiving ESG strategyas a means to tackle global challenges like climate change and inequality. This openness contrasts with conservative CEOs, who tend to be less responsive to external pressures, such as social and environmental demands, focusing instead on maintaining internal business priorities. These preferences align with the openness– closedness framework in strategic leadership research (Gupta etal.2021; Gupta and Briscoe2020). Accordingly, liberal CEOs prefer an opensystem decisionmaking process that actively considers external stakeholders—including the broader society—in their strategic decisions. In contrast, conservative CEOs tend to take a closedsystem approach, isolating the firm from its external environment and prioritizing internal objectives and resource conservation (Chandler et al. 2023; Gupta and Briscoe2020). This difference in decisionmaking style underscores the ideological divide between liberal and conservative CEOs (Chandler et al. 2023). Liberal CEOs, valuing external engagement, are more likely to collaborate with stakeholders, including regulatory bodies, nongovernmental organizations, and socially conscious consumers (Chandler etal.2023; Gupta and Briscoe2020), to promote ESG initiatives. This opensystem approach allows them to incorporate broader social and environmental issues into their strategic priorities (Gupta etal.2021; Gupta and Briscoe2020). In contrast, conservative CEOs focus on internal efficiency and profitability, viewing ESG demands primarily as external pressures that could compromise these goals (Chandler etal.2023; Gupta and Briscoe2020). As a result, they may resist adopting ESG practices, prioritizing the firm's internal interests and shielding the organization from external stakeholder demands. Beyond openness to change, the second critical value that sets liberal CEOs apart is their more assertive advocacy for equality. Liberal CEOs tend to view ESG as aligned with their egalitarian principles, which are intrinsically focused on promoting fairness and reducing inequalities (Jost et al. 2003; Jost and Amodio2012). Thus, liberal CEOs perceive ESG as a mechanism for driving social change and recognize their 4788 Business Strategy and the Environment, 2025 agency in addressing grand societal challenges by promoting, for example, fair labor practices or community engagement (Gupta etal.2021; Weng etal.2023). This egalitarian orientation contrasts with conservative CEOs, who prioritize maintaining existing status hierarchies and view inequality as a natural outcome of meritocratic systems where individuals succeed based on their own efforts (Erikson and Tedin 2019; Jost et al. 2009). Therefore, conservative CEOs are less inclined to view ESG as a priority since they may see it as imposing external controls that disrupt the natural order of organizational and societal hierarchies. In line with these ideological differences, liberal and conservative CEOs also differ in their understanding of the roots of inequality (Graham etal.2009). Politically liberal CEOs recognize the situational and contextual factors—such as historical injustices, systemic biases, and unequal access to opportunities— that have contributed to societal disparities (Graham etal.2009; Jost etal.2003). They believe addressing these inequalities requires collective action, aligning with ESG principles that foster greater equality across environmental, social, and governance dimensions (Jost etal.2003; Y. Kim2024b; Swigart etal.2020). In contrast, conservative CEOs emphasize individual agency, which implies that individuals can improve their status through personal effort—without the need for broader structural changes or external intervention (Graham etal.2009; Jasinenko etal.2020). Differences in openness, egalitarianism, and perspectives on inequality influence how liberal and conservative CEOs approach ESG initiatives. Liberal CEOs, with their openness to change and focus on equality, see ESG strategy as a tool to address societal challenges like climate change. They favor collaboration with external stakeholders and integrate broader social concerns into corporate strategies. In contrast, conservative CEOs prioritize internal efficiency and individual agency, often viewing ESG as an external pressure that disrupts business operations. Considering these ideological distinctions, we propose the following hypothesis: Hypothesis 1. The political ideology of CEOs influences a firm's ESG performance. Specifically, liberal CEOs tend to enhance ESG performance, whereas conservative CEOs hinder it. 2.2 | Moderating Role of Ivy League Education Although the direct influence of CEO political ideology on ESG performance has been established, it is essential to consider how other factors might shape this relationship (Baron and Kenny1986; Campbell etal.2019). We propose that Ivy League education acts as a critical boundary condition, intensifying the connection between a CEO's political ideology and their engagement in ESG practices by providing the human and social capital needed to support ideologically driven decisions. The eight Ivy League institutions—Harvard, Yale, Princeton, Columbia, Dartmouth, Brown, the University of Pennsylvania, and Cornell—are synonymous with academic excellence and social prestige (Hernández2009; Lillard and Gerner1999). Ivy League education significantly influences the careers of its graduates, particularly those who rise to corporate leadership positions, such as CEOs (Martelli and Abels2010; Miller etal.2015). Graduates of these schools benefit from rigorous education, expansive networks, and reputational capital, which collectively shape their perspectives and foster a sense of responsibility and leadership that extends into their professional lives (Lillard and Gerner1999; Mullen2009). For CEOs, an Ivy League education offers access to elite social networks that enhance their influence in business, government, and other domains (Alba and Moore 1982; Chou etal.2015; Miller etal.2015). These networks are particularly relevant in the context of ESG strategy, where credibility and resources from influential connections can help align strategic decisions with societal expectations—including those related to ESG initiatives(Gassmann and JacksonMoore2023). Moreover, Ivy League education tends to instill a sense of security that enables CEOs to express their personal views with less fear of stigma or backlash (E. Kim2024a). Consequently, liberal CEOs may feel encouraged to champion progressive ESG strategies, whereas conservative CEOs may become more persistent in opposing them. Supporting this, research indicates that Ivy League–educated CEOs “feel comfortable with pushing their opinions without fears of being stigmatized/devalued” (E. Kim2024a, 1080). Beyond social networks, Ivy League institutions emphasize critical thinking, problemsolving, and global awareness (Martelli and Abels2010; Miller etal.2015)—skills particularly valuable in navigating the complexities of modern corporate responsibility (Heubeck2024b). These abilities enable CEOs to balance diverse stakeholder demands effectively (Miller et al. 2015), which is essential for ESG decisionmaking. For example, Yale University's Sustainability Plan 2025 exemplifies institutional commitment to sustainability, aiming to shape leaders who align business strategies with global sustainability goals (Goodall and Moore 2019; Yale University2016). However, Ivy League education provides more than decisionmaking tools—it influences how political ideology shapes corporate strategy. For liberal CEOs, the values promoted within the Ivy League's academic and social networks may reinforce their commitment to ESG strategy. Conversely, for conservative CEOs, the privilege and social power conferred by an Ivy League education enable them to assert their ideological beliefs more decisively (Chou etal.2015; Moore2008). Thus, Ivy League–educated CEOs are uniquely positioned to leveragethe impact of their political ideologies on ESGrelated decisions. In summary, Ivy League education is likely to moderate the relationship between CEO political ideology and ESG performance. By providing social capital (e.g., influential networks and reputational benefits) and human capital (e.g., advanced cognitive skills and global perspectives), Ivy League institutions empower CEOs to act with greater confidence and alignment with their ideological views (BonillaSilva etal.2006; Chou etal.2015; Moore2008). This institutional context magnifies the tendencies of CEOs to prioritize their ideological inclinations in corporate decisionmaking. Based on these arguments, we propose the following hypothesis: 4789 Hypothesis 2. The relationship between CEO political ideology and firm ESG performance is moderated by whether the CEO holds an Ivy League degree, with elite educational backgrounds amplifying the alignment between CEO political ideology and ESG outcomes. In conclusion, the direct effect of CEO political ideology on ESG performance (Hypothesis1) and the contingency effect of CEO Ivy League on this direct effect (Hypothesis2) lead to this study's research model, as shown in Figure1. 3 | Research Methodology 3.1 | Data Collection In this study, we analyzed manufacturing firms from the S&P 900 midand largecap index, covering the period from 2016 to 2019.2 To mitigate survivorship bias, we included all firms listed at any point within this timeframe (Brown et al. 1992; Carpenter and Lynch1999). We chose this timeframe to avoid the years influenced by the Global Financial Crisis and the COVID19 pandemic, minimizing potential disruptions to firm operations (Hermundsdottir etal.2022; Issah etal.2023). The start year, 2016, was specifically chosen as it marks a period of relative economic stability following the recovery from the Global Financial Crisis (Pavićević and Keil2024). Moreover, beginning the sample in 2016 provided a sufficient number of observations while ensuring the dataset reflected recent trends in the manufacturing sector, such as technological advancements and Industry 4.0 (Ghobakhloo2020), sustainability and environmental concerns (Buallay 2019; Heubeck2024b), or trade policy uncertainty (Handley and Limão2022), without being skewed by subsequent market disruptions. We excluded 607 nonmanufacturing firms based on their primary NAICS codes, focusing on manufacturing firms due to significant variations in ESG practices across industries (Frink etal.2003; Solakoglu2013). Manufacturing firms face significant stakeholder pressure and play a crucial role in advancing sustainable practices (Buallay2019; Mani etal.2014), making them particularly wellsuited for studying ESG factors and enabling meaningful comparisons between firms. Our initial sample included 322 manufacturing firms from 2016 to 2019, for which we retrieved data from LSEG Eikon. When multiple CEOs were present in a year, we selected the longest serving CEO (Quigley and Hambrick2015), which resulted in 419 CEOs. We collected missing and additional data from firms' annual statements and official company websites and compiled additional CEO data from publicly available information. Specifically, we manually retrieved and verified the correctness of demographic characteristics and education data from multiple sources, including annual reports, business social media platforms such as LinkedIn, reliable business data from Bloomberg, or other sources such as university websites, alumni associations, or the Notable Names Database. Following previous research (e.g., Bhandari etal.2020; Elnahas and Kim 2017), we collected political donation data from the Federal Election Commission (FEC) and the Center for Responsible Politics' OpenSecrets websites. We made significant efforts to ensure accurate data collection for each CEO. Using OpenSecrets, we initially searched by the CEO's first and last name. This search yielded correct results for unique names, but additional verification was needed for more common names. We used middle names, employers, and locations to accurately compile donation data, involving extensive research on a CEO's employment history and residences. This procedure resulted in over 22,000 donations, which we carefully screened to ensure correct attribution to the respective CEOs. To ensure that the contributions of CEOs are a valid predictor of their political ideology, we deleted all donations to nonpartisan PACs or Super PACs from the dataset, as these donations reflect strategic interests (Bhandari etal.2020; Ferris etal.2019). We manually searched publicly available information to discern whether nondonating CEOs publicly identified as liberal or conservative or were party members. The absence of politically vocal CEOs without corresponding donation data further validates the reliability of the donationbased measure for assessing CEO political ideology. The final research sample comprises the donations of 216 CEOs, which we matched with data sourced from LSEG Eikon and supplemented with handcollected data (Francis etal.2016; Hutton etal.2014). The final dataset is an unbalanced panel comprising 769 firmyear observations from 233 firms. 3.2 | Variable Measurements 3.2.1 | Study Variables The measurement and data sources for all variables are summarized in Table 1 and detailed below. ESG performance data were collected from LSEG Eikon, which is known for its comprehensive coverage and objective measurement of ESG performance across environmental, social, and governance pillars (Del Vitto etal.2023). LSEG Eikon has become one of the primary sources of ESG data used in empirical research.3 It categorizes ESG scores into percentiles ranging from D− (ESG laggards) to A + (ESG leaders) (LSEG2023). We used the percentile score, ranging from 0 to 100. Our dependent variable, ESG performance, considers the ESG percentile score (ranging from 0 to 100) at t + 1 to mitigate causality concerns and consider the time lag between CEOs' decisionmaking and the eventual materialization of their decisions (Semadeni etal.2022). CEO political ideology is an index variable indicating a CEO's political orientation on the conservative–liberal spectrum (Elnahas and Kim 2017; Jost et al. 2009). The US bipartisan political FIGURE 1 | Research model: CEO political ideology, CEO Ivy League degree, and ESG performance. 4790 Business Strategy and the Environment, 2025 TABLE 1 | Variable descriptions. Variable type Variable Measurement Data source Study variables ESG performance ESG rating percentile scores, ranging from 0 to 100, with low scores corresponding to ESG laggards (D) and high scores to ESG leaders (A) LSEG Eikon CEO political ideology Calculated as the difference between contributions to the Republican and Democratic parties, divided by total contributions; this variable ranges from −1 (indicating very conservative ideology) to +1 (indicating very liberal ideology) FEC data retrieved from OpenSecrets CEO Ivy League degree Dummy variable coded 1 if the CEO has a degree from an Ivy League institution (Princeton University, Harvard University, Yale University, University of Pennsylvania, Brown University, Columbia University, Cornell University, Dartmouth College) and 0 otherwise LSEG Eikon, manual research (e.g., annual reports, LinkedIn, Bloomberg, university websites, alumni associations, and Notable Names database) CEOlevel control variables CEO age Current age of the CEO (calculated as follows: fiscal year − birth year) LSEG Eikon, manual research CEO gender Dummy variable coded 1 for female CEO and 0 for male CEO LSEG Eikon, manual research CEO firm tenure Years the CEO has worked at the firm (calculated as follows: current year − year started working for the firm). LSEG Eikon, manual research CEO STEM degree Dummy variable coded 1 for CEO with a degree in science, technology, engineering, or mathematics (i.e., higher education in STEM fields) and 0 otherwise LSEG Eikon, manual research CEO donation number Number of political donations to parties or candidates FEC data retrieved from OpenSecrets Firmlevel control variables Firm performance Return on assets (calculated as follows: net income divided by total assets) LSEG Eikon Firm age Years since incorporation (calculated as follows: current year − year of founding) LSEG Eikon, manual research Firm size Natural logarithm of the total number of employees LSEG Eikon R&D intensity R&D spending divided by sales, with missing values being replaced with 0 (Koh and Reeb2015) LSEG Eikon Leverage Total debt divided by total assets LSEG Eikon Slack resources Available slack, calculated as follows: current ratio = current assets divided by current liabilities (Marlin and Geiger2015) LSEG Eikon Governancelevel control variables Board size Total number of directors LSEG Eikon Board tenure Average tenure of directors LSEG Eikon (Continues) 4791 system allows differentiation between liberal (Democratic Party) and conservative (Republican Party) ideologies (Weng and Yang2024). Donations exceeding $200 to any political party must be reported to the FEC, offering a foundation for analyzing political leanings (Weng and Yang2024). Given the stability of political ideology over time, we examined a CEO's entire donation history for a comprehensive understanding (Green etal.2004). To determine CEO political ideology, we measured the difference between their contributions to the Republican and Democratic parties, then divided by the total contributions. This approach reflects a CEO's political orientation on a scale from −1 (very conservative) to +1 (very liberal) (Hutton et al. 2015; Unsal etal.2016). To confirm their political orientation, we manually searched publicly available data for CEOs without donation records. We excluded nondonating CEOs with no public political affiliation to prevent introducing bias to the sample by making assumptions about CEOs' political leanings.4 To assess whether CEOs possess an elite education, we examined whether the CEO holds a degree from an Ivy League institution. CEO Ivy League degree was measured using a dummy variable, indicating whether CEOs obtained degrees from one of the eight Ivy League institutions: Princeton, Harvard, Yale, University of Pennsylvania, Brown, Columbia, Cornell, and Dartmouth. These data were obtained from LSEG Eikon and supplemented with other reliable sources, including firms' annual reports, LinkedIn, Bloomberg, university websites, alumni associations, and the Notable Names database. The CEO Ivy League degree variable is coded with the value 1 if the CEO received a degree from an Ivy League institution (and 0 if not) (Miller etal.2015). 3.2.2 | Control Variables We included several other variables in the research model to account for factors potentially affecting ESG performance. We included five control variables at the CEO level based on prior research. CEO age and CEO gender account for risk preferences and potential effects on ESG performance (Glass etal.2016; Le etal.2024). CEO firm tenure captures the impact of accumulated firmspecific knowledge and socialization processes (Chen etal. 2019; Darouichi etal.2021). CEO STEM degree, a dummy variable, indicates a background in science, technology, engineering, or mathematics that may influence decisionmaking concerning ESG performance(Cahyono et al. 2024; Zizka etal.2021). Last, CEO donation number, reflecting political activism (J. Liu etal.2023), was included as it may also relate to ESG performance. We included six firmlevel controls. Firm performance, measured by return on assets (ROA), reflects the potential of higher performing firms to invest in ESG initiatives (Huang 2021). Firm age considers older firms' prioritization of ESG due to reputational concerns (D'Amato and Falivena2020). Firm size, measured by the natural logarithm of total employees, influences ESG performance due to resource variations and data availability between smaller and larger firms (Drempetic etal. 2020). R&D intensity, calculated as R&D spending to total sales, may drive ESG performance (AguileraCaracuel and GuerreroVillegas2018). Leverage, indicated by total debt to total assets, captures its presumed positive effect on ESG performance (Alareeni and Hamdan2020). Lastly, slack resources represent discretionary financial resources firms could invest in ESG initiatives (AguileraCaracuel etal.2015). Variable type Variable Measurement Data source Board gender diversity Percentage of female directors (calculated as follows: number of female directors divided by board size) LSEG Eikon Board affiliations Average number of external directorial affiliations LSEG Eikon Board independence Percentage of independent directors (calculated as follows: number of independent directors divided by board size) LSEG Eikon CEO duality Dummy variable coded 1 if CEO is also the board chairperson and 0 otherwise LSEG Eikon Management compensation Total compensation of the management in millions USD LSEG Eikon Sustainability compensation incentives Dummy variable coded 1 if senior executive compensation is linked to CSR, sustainability, or health and safety targets and 0 otherwise LSEG Eikon CSR sustainability committee Dummy variable coded 1 if firms have a CSR committee and 0 otherwise LSEG Eikon TABLE 1 | (Continued) 4792 Business Strategy and the Environment, 2025 We included nine governancelevel control variables. Board size accounts for monitoring differences between smaller and larger boards (Goodstein etal.1994). Board tenure addresses potential declines in monitoring efficiency with longer director tenures (Jeong etal.2021). Board gender diversity captured the dynamics of diverse boards (Issa2023). Board affiliations control the benefits of more connected boards in advising on ESG issues (de Villiers et al. 2011). Board independence accounts for the enhanced ESG performance associated with more independent boards (Brinette et al. 2023). CEO duality considered the dual effect of CEOs on ESG priorities (de Villiers etal.2011). Management compensation was included as highly compensated managers may be less concerned about ESG practices (de Villiers etal.2011). Sustainability compensation incentives can motivate executives to prioritize CSR issues in their decisionmaking, impacting ESG performance (BaraibarDiez etal.2019). Last, the control CSR sustainability committee captures the possible benefits of a designated committee for ESG performance (Velte2016). Year controls and industry controls (twodigit NAICS level) were incorporated to mitigate potential time and industryspecific variances in ESG performance. These fixed effects help establish a causal link between CEO political ideology and ESG performance while accounting for temporal and sectorspecific factors (Erhemjamts etal.2013; Hutton etal.2014). 4 | Analysis Method and Results 4.1 | Main Results We selected a panel data estimator due to the longitudinal nature of our data, which is consistent with previous research grounded in upper echelons theory (e.g., O'Sullivan et al. 2024). First, we used the Breusch and Pagan (1980) test to determine the appropriate regression technique. The test results supported a randomeffects model over a simple OLS regression (p = 0.000), validating the panel structure of the data (Baltagi 2021). We then conducted a Durbin–Wu– Hausman test to compare the randomeffects and fixedeffects models, which confirmed the fixedeffects model as the preferred approach (p = 0.000) (Baltagi etal.2003; Greene2019). We then tested for possible heteroscedasticity using the modified Wald test, which detected heteroscedasticity (p = 0.000) (Greene 2019; Wooldridge 2002). Consequently, we implemented a fixedeffects model with robust standard errors clustered at the firm level. We calculated descriptive and bivariate statistics for all study variables, as summarized in Table2. The sampled firms showcase a mean ESG score of 57.45, which corresponds to a B− score equivalent to aboveaverage ESG performance (LSEG2023). The mean political liberalism of CEOs is −0.31, which suggests that CEOs lean toward conservative ideologies. Additionally, 18.9% of CEOs have obtained a degree from an Ivy League institution. Table3 reports the hierarchical regression results. There is no evidence of multicollinearity in the data, with the maximum variance inflation factor (VIF) of 2.39 well below the conventional thresholds of 5 or 10 (Johnston etal.2018; Kennedy2008). Hypothesis1 proposed that CEO political ideology affects ESG performance. The coefficient of CEO political ideology is positive and significant in Model 1 (b = 1.720, p = 0.036), and this positive effect is consistent across all subsequent models. Due to the value range of CEO political ideology between −1 (conservative) to +1 (liberal), this finding implies that liberal CEOs promote firms' ESG performance, whereas conservative CEOs harm ESG performance. Thus, the findings support Hypothesis1 by demonstrating that CEO political ideology significantly affects ESG performance. Hypothesis2 posited that Ivy League degree moderates the relationship between CEO political ideology and ESG performance. This moderation effect is tested in Model 4, where the interaction coefficient is positive but insignificant (b = 0.921, p = 0.694). Therefore, there is no evidence supporting the moderation effect of Ivy League degree on the CEO political ideology–ESG performance relationship, leading to the rejection of Hypothesis2. In conclusion, the regression results support the effect of CEO political ideology on ESG performance (Hypothesis 1) but not for the moderation effects of CEO Ivy League degree (Hypothesis2). However, the results revealed that Ivy League degree has a significant negative direct effect onESG performance (Model 3: b = −4.913, p = 0.022). Thus, the findings demonstrate that CEO Ivy League degree is not a moderator of the CEO political ideology–ESG performance relationship but a managerial background factor that directly hinders ESG performance. The “Discussion and Implications” section further details these results. 4.2 | Additional Analyses 4.2.1 | Endogeneity Analyses We used multiple approaches to handle endogeneity concerns. First, we employed an instrumental variable (IV) twostage least squares (2SLS) model. Following previous research on political ideology (Hutton etal.2014; Kashmiri and Mahajan2017), we initially considered four CEO characteristics as possible IVs: CEO age, CEO gender, CEO minority status (dummy coded 1 for nonwhite CEOs), and CEO military experience (dummy coded 1 for CEOs with military experience or education). However, since CEO age and gender were included in the regression model, they could not serve as IVs (Ullah etal. 2021). From a theoretical perspective, as also argued and confirmed in previous research on CEO political ideology (e.g., Hutton etal.2014; Kashmiri and Mahajan2017), these variables are valid instruments that are correlated with a CEO's political ideology but not with the dependent variable5 while they are also stable even after the CEO is appointed. We collected the data for CEO military education from executive biographies from LSEG Eikon and other reliable data sources (e.g., annual reports, LinkedIn, Bloomberg, university websites, alumni associations, and the Notable Names database). Due to concerns about the accuracy and definition of CEO minority status in prior research, we adopted an alternative approach as the traditional categorization into “white” and “nonwhite” overlooks the diversity within the nonwhite category 4799 League undergraduate degree (b = −7.303, p = 0.030) and CEO Ivy League graduate degree (b = −3.570, p = 0.078) have a direct negative and statistically significant effect on ESG performance. The results show that the negative effect of CEO Ivy League degrees seems to be driven primarily by the effect of undergraduate education due to the larger and more significant coefficient. 4.2.3 | Robustness Analyses We performed several robustness analyses to confirm the validity of the results. First, we tested for the possibility of overcontrolling or inadequate controls by using a more conservative set of control variables that are likely to be exogenous. The additional analysis (see Table 10) shows that our results remain consistent with the main results when controlling for a minimum of relevant variables (firm age, firm size, board size, board independence, year, and industry dummies) or even when controlling for no firm or governance factors (i.e., only year and industry dummies). Thus, we can rule out that the choice of control variables has driven the effects in our results. Second, we dropped all CEOs with a total donation amount below $1000 to rule out the possibility that less donating CEOs are less stable in their political ideology. The results using this modified subsample remained consistent with our main results (see Table11). Thus, we can rule out that sample selection has influenced our results. Third, we used alternative measures of CEO political ideology to rule out that the measurement has influenced the results (see Table12). The first was CEO liberal, a dummy variable taking the value of 1 if a CEO made more than 50% of their donations to Democrats and 0 otherwise (Bhandari and Golden 2021; Hutton etal.2014). The results remained in line with the main results; the positive effect of CEO liberal on ESG performance was even stronger using the alternative measure than in the original model (b = 3.468, p = 0.011). The second was CEO strong liberal, a dummy variable coded 1 if a CEO made no donations to TABLE 9 | Additional test: CEO Ivy League undergraduate and graduate education as moderation variables. ESG performance Coefficient Std. error Coefficient Std. error Coefficient Std. error Coefficient Std. error CEO political ideology 2.219*** 0.822 2.136** 0.882 2.128*** 0.766 2.158** 0.877 CEO Ivy League undergraduate degree −7.303** 3.352 −7.250** 3.203 CEO political ideology × CEO Ivy League undergraduate degree 1.297 4.049 CEO Ivy League graduate degree −3.570* 2.018 −3.575* 1.988 CEO political ideology × CEO Ivy League graduate degree −0.127 2.401 Control variables YES YES YES YES Year controls YES YES YES YES Industry controls YES YES YES YES R2within 0.258 0.258 0.253 0.253 R2between 0.115 0.110 0.175 0.174 R2overall 0.112 0.108 0.149 0.149 F5.69 5.46 5.46 5.28 Prob > F0.000 0.000 0.000 0.000 Notes: Fixed effects with robust standard errors clustered at the firm level, number of observations = 769, number of groups = 233; ***p < 0.01, **p < 0.05, *p < 0.10. 4800 Business Strategy and the Environment, 2025 TABLE 10 | Robustness test: Different control variables. ESG performance Coefficient Std. error Coefficient Std. error Coefficient Std. error Coefficient Std. error Coefficient Std. error Coefficient Std. error CEO political ideology 1.406** 0.604 1.881*** 0.664 1.782** 0.749 1.344** 0.600 1.798*** 0.642 1.663** 0.737 CEO Ivy League degree −3.941* 2.198 −3.884* 2.016 −3.900* 2.192 −3.823* 2.002 CEO political ideology × CEO Ivy League degree 0.319 2.144 0.448 2.160 Firm age −0.001 0.008 −0.002 0.008 −0.002 0.008 Firm size 0.072 0.203 0.079 0.203 0.076 0.202 Board size −0.020 0.080 −0.025 0.080 −0.024 0.080 Board independence −0.007 0.028 −0.007 0.028 −0.007 0.028 Constant 54.340*** 2.834 55.236*** 2.902 55.203*** 2.864 54.201*** 0.799 55.020*** 0.920 54.972*** 0.860 Year controls YES YES YES YES YES YES Industry controls YES YES YES YES YES YES R2within 0.212 0.218 0.218 0.211 0.218 0.218 R2between 0.008 0.009 0.010 0.009 0.010 0.010 R2overall 0.023 0.025 0.025 0.024 0.026 0.026 F9.87 9.36 8.61 15.76 14.02 12.31 Prob > F0.000 0.000 0.000 0.000 0.000 0.000 Notes: Fixed effects with robust standard errors clustered at the firm level, number of observations = 772, number of groups = 233; ***p < 0.01, *p < 0.05, *p < 0.10. 4801 Republicans throughout their entire donation history (Elnahas and Kim2017). The results also remained robust; the coefficient of CEO strong liberal on ESG performance was even stronger than in the original model (b = 3.719, p = 0.009). The negative direct effect of CEO Ivy League degree on ESG performance persists across all models. Fourth, we winsorized all continuous variables at the 1% and 99% levels to rule out that our results were impacted by potential outliers (see Table13). Our main results remain consistent when using winsorized variables. Specifically, the effect of CEO political ideology on ESG remains positive and significant (b = 2.175, p = 0.006), and the moderation effect remains positive but insignificant (b = 0.694, p = 0.767). The negative effect of CEO Ivy League degree on ESG also persisted across the models using winsorized variables (b = −5.073, p = 0.017). Therefore, we can effectively rule out that outliers influence our results. These robustness analyses collectively demonstrate that our results remain consistent across various model specifications. 5 | Discussion and Implications This study addresses a timely yet underexplored topic: the relationship between CEOs' political ideology and their firms' ESG performance and the moderating role of elite education from Ivy League institutions. In support of our first hypothesis, we found that CEO political ideology significantly affects ESG outcomes. Specifically, liberal CEOs are associated with higher ESG performance, whereas conservative CEOs tend to deter ESG initiatives. These findings transfer the core principles of political psychology (e.g., Jost etal.2003; Jost and Amodio2012) to upper echelons theorizing (Hambrick2007; Hambrick and Mason 1984), reinforcing the view that liberal CEOs, characterized by greater openness to change and concern for societal welfare in their decisionmaking, are more likely to prioritize ESG efforts. Conversely, conservative CEOs prioritize profitability and shareholder value in their more closedsystem decisionmaking. They are more reluctant to engage in ESG initiatives, which may be perceived as diverging from traditional business goals. Through its focus on ESG strategy, our study adds new insights into the political ideology literature within the upper echelons framework. Specifically, we offer a nuanced understanding of how CEO political ideology affects corporate ESG efforts. Unlike CSR, which has been widely studied (e.g., Chin etal.2013; Gupta etal.2021), ESG represents a broader framework that encompasses not only social responsibility but also environmental and governance dimensions (Gillan etal.2021; Huang2021). Given the increasing political polarization surrounding ESG, particularly in the US (Winston2023), our findings underscore the importance of understanding how ideological perspectives shape corporate ESG strategies. Moreover, this study contributes to a microlevel understanding of the drivers behind ESG performance by revealing how political ideology differentially affects the three pillars of ESG performance. This offers an important extension of previous research, which has primarily focused on the role of CEO political ideology in CSR (e.g., Chin etal.2013; Gupta etal.2021). By focusing on ESG, we highlight the broader implications for firms seeking to navigate corporate sustainability challenges in an increasingly politicized environment. Our additional analyses foster a nuanced understanding of how CEOs' political ideology translates into ESG outcomesas we examine the effects on the three ESG pillars. Although our findings confirm the influence of CEO political ideology on the social and governance pillars of ESG, we observed no significant relationship between political ideology and environmental performance, contrasting previous research (e.g., Chin etal.2013; Y. Kim 2024b). This finding suggests that environmental performance might be driven by factors beyond the CEO's political ideology. First, CEOs may have less latitude over environmental issues than social or governance issues. Strict legal standards and industryspecific requirements related to environmental issues might lead to greater uniformity in environmental outcomes across firms (Delmas and Toffel2008; Shao etal.2020), regardless of a CEO's political ideology. Second, TABLE 11 | Robustness test: Minimum donation amount of $1000. ESG performance Coefficient Std. error Coefficient Std. error CEO political ideology 2.296*** 0.810 1.952* 1.104 CEO Ivy League degree −5.110** 2.273 −4.842** 2.025 CEO political ideology × CEO Ivy League degree 1.063 2.596 Control variables YES YES Year controls YES YES Industry controls YES YES R2within 0.254 0.254 R2between 0.137 0.143 R2overall 0.124 0.127 F4.93 4.75 Prob > F0.000 0.000 Notes: Fixed effects with robust standard errors clustered at the firm level, number of observations = 742, number of groups = 225; ***p < 0.01, **p < 0.05, *p < 0.10. 4802 Business Strategy and the Environment, 2025 TABLE 12 | Robustness test: Alternative measures of CEO political ideology. ESG performance Coefficient Std. error Coefficient Std. error Coefficient Std. error Coefficient Std. error CEO liberal 3.468** 1.345 3.451* 1.883 CEO strong liberal 3.719*** 1.407 4.380*** 1.673 CEO Ivy League degree −4.443** 2.137 −4.459 2.795 −5.020** 2.138 −4.601* 2.457 CEO liberal × CEO Ivy League degree 0.041 2.876 CEO strong liberal x CEO Ivy League degree −2.058 3.574 Control variables YES YES YES YES Year controls YES YES YES YES Industry controls YES YES YES YES R2within 0.258 0.258 0.257 0.257 R2between 0.138 0.138 0.117 0.107 R2overall 0.127 0.127 0.113 0.107 F5.15 4.98 5.59 5.47 Prob > F0.000 0.000 0.000 0.000 Notes: Fixed effects with robust standard errors clustered at the firm level, number of observations = 769, number of groups = 233; ***p < 0.01, **p < 0.05, *p < 0.10. 4803 external stakeholder pressures may push liberal and conservative CEOs to adopt environmental strategies. For this reason, environmental issues have become one of the top boardroom topics (Deloitte Global 2022), and the focus on ESG has increasingly shifted disproportionately toward environmental issues (Mrchkovska etal.2023). Additionally, environmental initiatives often involve longterm risks and require sustained investment before tangible outcomes are realized (Bansal and DesJardine2014; Qadir etal.2021). CEOs may prioritize social and governance initiatives over longerterm environmental efforts, which can yield more immediate reputational benefits. Environmental issues are also frequently perceived as operational or technical challenges, which may lead CEOs to approach them from a more apolitical standpoint (Ioannou and Serafeim2023). Therefore, the effect of a CEO's political ideology on environmental outcomes might be diluted. Furthermore, this study provides valuable insights into the intersection of CEO political ideology, Ivy League education, and ESG performance. By demonstrating that Ivy League education does not moderate the relationship between a CEO's political ideology and ESG performance—but instead has a direct negative effect on ESG—our study highlights noteworthy discussion points and implications for future theorizing. For one, the absence of the moderation effect suggests that a CEO's elite educational background does not alter how their political beliefs influence ESG practices. This novel finding suggests that CEOs may bring existing ideological views into their executive role, where these beliefs guide their decisionmaking on ESG issues independently of their Ivy League education. In this sense, a CEO's political ideology will likely remain intact and uninfluenced by the perspectives acquired through elite education. We find contrasting evidence to the upper echelon's presumption that a CEO's political ideology provides the primary cognitive framework for ESGrelated decisions. Unlike Miller etal.(2015), we do not find evidence supporting the “strategic value to an Ivy education” (p. 942) within the ESG context. Instead, our study suggests that Ivy League education itself directly correlates with lower ESG performance, irrespective of political ideology. In other words, our results do not support the notion that CEOs use their Ivy League background to reinforce ideologically driven preferences for more or less ESG emphasis. Instead, the findings reveal two largely independent channels. First, the ideological channel highlights how a CEO's political ideology shapes the decisionmaking preferences regarding ESG initiatives. Liberal CEOs are ideologically inclined to promote ESG strategy, driven by their opensystem decisionmaking approach and stakeholderoriented values. In contrast, conservative CEOs tend to deprioritize ESG outcomes, favoring a shareholdercentric approach rooted in a closedsystem decisionmaking framework. Second, the elite education channel captureshow an Ivy League background affects decisionmaking by orienting it toward traditional business goals. Ivy League–educated CEOs may prioritize career advancement and reputationbuilding, focusing on financial metrics rather than ESG outcomes. Thus, Ivy League education appears to influence the means to achieve corporate goals—by providing connections and resources—rather than the ends, especially regarding ESG strategy. In this sense, Ivy League education may provide reputational benefits and prestige, often associated with career progression rather than profoundly influencing a CEO's values or ideological approach to specific business issues like ESG strategy. With respect to this, Ivy League education could potentially override personal political preferences. For instance, even if liberal CEOs are ideologically inclined to value ESG, their elite educational background may steer them toward prioritizing more conventional business objectives over their personal political leanings. Thus, the influence of Ivy League education appears to impact TABLE 13 | Robustness test: Winsorized variables. ESG performance Coefficient Robust std. error Coefficient Robust std. error CEO political ideology 2.175*** 0.781 1.982** 0.963 CEO Ivy League degree −5.073** 2.104 −4.952** 1.901 CEO political ideology × CEO Ivy League degree 0.694 2.339 Control variables YES YES Year controls YES YES Industry controls YES YES R2within 0.255 0.256 R2between 0.122 0.124 R2overall 0.118 0.119 F5.26 5.02 Prob > F0.000 0.000 Notes: Fixed effects with robust standard errors clustered at the firm level, number of observations = 769, number of groups = 233, all continuous variables are winsorized at the 1% and 99% levels; ***p < 0.01, **p < 0.05, *p < 0.10. 4804 Business Strategy and the Environment, 2025 decisionmaking processes related to ESG strategy by emphasizing reputational and traditional business outcomes over ideologically motivated ones. It is important to note that, at first glance, our findings appear to contradict a key study on Ivy League education by Miller et al. (2015), which concluded that firms led by Ivy League–educated CEOs, particularly those with undergraduate degrees, achieve higher and more sustained market valuations. However, our results are consistent with the underlying rationale: Financial performance often aligns with shareholder interests, which may benefit from the elite networks cultivated by Ivy League–educated CEOs. These networks, however, could negatively impact ESG performance by prioritizing shareholder value over broader social responsibilities. The additional analysis highlights that the negative impact of Ivy League education on ESG performance is especially evident among CEOs with undergraduate degrees. This finding suggests that formative educational experiences at elite institutions may cultivate values or behaviors less aligned with strong ESG outcomes. Consistent with imprinting theory (Marquis and Tilcsik2013), the results underscore that formative life experiences, particularly during undergraduate education, have enduring consequences in shaping behaviors and decisionmaking processes that influence ESG performance. Altogether, our study expands upper echelons theory by identifying how these microlevel factors—political ideology and elite education—function as channels influencing strategic outcomes in relation to contemporary ESG challenges. 5.1 | Practical Recommendations This study offers several practical implications by revealing that CEOs' political ideologies and Ivy League education influence their decisionmaking concerning ESG outcomes. Consequently, it is crucial for CEOs to critically assess how their personal traits and educational backgrounds align with the outcomes they seek to achieve, which might involve deliberate efforts to balance their innate decisionmaking tendencies (Chin etal.2021). For instance, CEOs with conservative political views might consider adopting a more collaborative approach within diverse top management teams (TMTs) to enhance their focus on ESG priorities. Similarly, our findings suggest that corporate boards should tailor governance structures to complement their CEOs' decisionmaking styles to support the organization's overarching goals. For firms committed to ESG objectives, granting liberalleaning CEOs greater autonomy may leverage their natural inclinations toward decisionmaking that aligns with these goals. On the other hand, this study underscores that an Ivy League education—typically viewed positively—may inadvertently hinder stakeholder interests in relation to ESG issues. Companies led by more conservative or Ivy League–educated CEOs—who might intrinsically deprioritize ESG initiatives— should emphasize a teambased approach in decisionmaking. Such a strategy encourages leveraging the broader perspectives of the entire TMT rather than relying solely on the CEO's individual preferences. Beyond implications for decisionmaking frameworks and governance structures, this study offers suggestions for top management staffing, incentive structures, and leadership development programs. Firms should adopt a holistic approach to talent management by considering the diversity of political ideologies and educational backgrounds, which can foster a broader range of perspectives within the organization— particularly valuable for navigating complex ESG issues. Leadership development programs should aim to broaden the perspectives of CEOs, especially those who are politically conservative or Ivy League–educated, by enhancing social awareness and stakeholderoriented decisionmaking skills. Incorporating ESG metrics into CEO performance evaluations can further incentivize alignment with sustainability goals, leading to improved overall ESG performance. This approach ensures that CEOs are motivated to prioritize ESG initiatives, ultimately resulting in enhanced organizational outcomes in relation to ESG. By implementing these practical implications, organizations can more effectively align their strategies with desired outcomes and contribute positively to broader societal and environmental challenges, advancing a more sustainable and equitable future in light of today's grand societal challenges. 5.2 | Future Research Our findings indicate that a CEO's political ideologies significantly predict their values and decisionmaking processes. Politically liberal CEOs tend to adopt a more stakeholderoriented perspective of business responsibilities compared to their conservative counterparts. Future research might explore the impact of CEO political ideology on ESG outcomes across different countries and political systems or investigate the political ideologies of entire TMTs (Chin etal.2013). In pursuing this line of inquiry, future research should incorporate additional factors when assessing the impact of political ideology on ESG performance to develop a more comprehensive understanding of the underlying dynamics. Further studies might also investigate the role of moderating factors, such as CEO power (Brahma and Economou2024; Chu etal.2023), within the context of CEO political ideology and ESG strategy, as power dynamics may play a critical role in influencing CEOs' capacity to shape strategic outcomes (Chin etal.2013). Our research lays crucial groundwork for further exploration of the intersection between CEO political ideology, decisionmaking, and corporate strategy. Future studies could investigate the longterm impact of ESG decisions influenced by political ideology on firm performance or conduct crosscultural analyses to explore how the link between CEO political ideology and ESG practices differs across various cultural or political settings. In conclusion, this study further enhances the academic understanding of how CEOs' personal backgrounds shape their decisionmaking processes and organizational outcomes. The findings emphasize the need for top managers, organizations, and stakeholders to critically evaluate the biases and inequities associated with CEOs' political ideologies and elite educational backgrounds. 4805 Author Contributions Tim Heubeck: conceptualization, methodology, data curation, formal analysis, visualization, project administration, writing – original draft, writing – review and editing. Annina Ahrens: conceptualization, writing – original draft, writing – review and editing. Acknowledgements Open Access funding enabled and organized by Projekt DEAL. Conflicts of Interest The authors declare no conflicts of interest. Data Availability Statement Data sharing is not possible due to provider restrictions. All other data are publicly available. Use of AIGC Tools The authors acknowledge that AIGC tools, including Grammarly and ChatGPT 4o, were used to improve spelling and grammar and perform general editing. Endnotes 1 We acknowledge the distinction between ESG and CSR. Nonetheless, our focus is on studying the effect of CEO political ideology on the three ESG pillars. ESG encompasses a broader spectrum of issues compared to CSR, covering environmental aspects (like energy efficiency and pollution control), social considerations (such as community engagement and workplace safety), and governance factors (including executive accountability and ethical business practices) (Martiny etal.2024). Because of the comprehensive scope and quantifiable nature of ESG performance (LSEG2023), we use firms' ESG performance as a metric to assess the impact of CEO political ideology onthe three ESG pillars. 2 Our dependent variable, ESG performance, is lagged by one year, extending our dataset through 2020. 3 ESG ratings can vary among different ESG rating agencies due to the absence of standardized ESG disclosures and the inherent influence of rating agencies (Berg etal.2022). Although we utilized LSEG Eikon, one of the most used ESG rating agencies, it is possible that ESG data from other agencies could have produced different results because of the inconsistencies in ESG ratings across various data providers. 4 We acknowledge that nondonating CEOs may hold their political beliefs private, especially with increasing public scrutiny against CEO activism (Feix and Wernicke2024). Assuming that nondonating CEOs are politically moderate might introduce severe bias to the sample because CEOs might not donate due to fearing public scrutiny for their personal political ideology. Thus, to differentiate between different political ideologies, previous research has used separate categories for politically liberal, conservative, moderate, and unaffiliated individuals (e.g., Vaidyanathan etal. 2011). This argumentation also corresponds to political research, which finds that individuals generally donate to candidates and parties that align with their own political ideology (Barber2016). In limiting our analysis to donating CEOs, we can effectively gauge CEOs' personal political convictions and uncover the undistorted effect of CEO political orientation on ESG. We excluded 83 nondonating CEOs, for which no public data on their political donation was available. This step is also necessary to conduct additional tests and assess potential endogeneity in our research data. 5 We note that recent research has begun to explore the influence of CEO minority status on CSR. However, this study by Do and Herbohn(2024) focused on the moderation effect of CEO minority status on the main relationship between board ethnic diversity and CSR. Our use of CEO BIPOC status, as an extension of CEO minority status, does not conflict with this study, as we focus on a structurally different outcome variable, and their use of minority status as a moderator differs fundamentally from our use of the variable as an instrument to capture exogenous variation in CEO political ideology. Our approach is further validated by postestimation diagnostics, which confirm the exogeneity of this instrument. 6 We are highly aware of the potential racial bias introduced by our own predispositions in reviewing a CEO's profile photographs. 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