Assessing the relationship between Environmental, Social and Governance (ESG) initiatives and the profitability of a firm: A case of Zambian Breweries Plc, Lusaka Plant

 Corresponding author: Eddie Mwenya Copyright © 2025 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution License 4.0. Assessing the relationship between Environmental, Social and Governance (ESG) initiatives and the profitability of a firm: A case of Zambian Breweries Plc, Lusaka Plant Eddie Mwenya * and Christine Lesa Department of Business Studies, Graduate School of Business, University of Zambia, Zambia. World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 Publication history: Received on 18 March 2025; revised on 23 April 2025; accepted on 26 April 2025 Article DOI: https://doi.org/10.30574/wjarr.2025.26.1.1470 Abstract The study establishes the relationship between Environmental, Social, and Governance (ESG) initiatives and the profitability of Zambian Breweries Plc, Lusaka Plant. The sample size was 160 for quantitative data and 10 for qualitative data. Using a multiple regression analysis of survey data and financial reports from 2021 to 2023, the study assesses the relationship between ESG initiatives and the firm’s profitability. The results reveal a moderate positive relationship (R = 0.406) between ESG initiatives and profitability, with ESG factors explaining 16.5% of the variation in profitability (R² = 0.165). Among the three ESG components, social initiatives exhibited the strongest relationship with profitability (β = 0.362, p < 0.05), indicating that employee training and development, responsible marketing and community engagement initiatives significantly enhance financial performance. Governance initiatives had a moderate but statistically insignificant relationship (β = 0.144, p = 0.065), suggesting the need for stronger governance structures to realize profitability gains. Conversely, environmental initiatives showed an extremely weak and insignificant relationship with profitability (β = 0.011, p = 0.883), likely due to high implementation costs and delayed financial returns. The findings align with the stakeholder theory, which emphasizes the financial benefits of prioritizing social responsibility, and partially support agency theory, which highlights the role of governance in profitability. Conversely, the weak relationship between environmental initiatives and profitability contradicts the resource-based view (RBV) theory, which posits that sustainability can be a source of competitive advantage and improved profitability. The qualitative findings highlight key implementation challenges, including lack of knowledge and expertise, resistance to change, lack of stakeholder engagement, limited access to sustainable resources and regulatory compliance challenges. To address these challenges, the study recommends strategies such as continuous staff development and training, enhanced community and stakeholder engagement, governance through transparency and ethics, and increasing investments in sustainable technology. The study concludes that while ESG initiatives contribute to profitability, Zambian Breweries Plc should prioritize social investments while strengthening governance and environmental initiatives. Keywords: Environmental, Social and Governance (ESG); Profitability; Sustainability; Zambian Breweries Plc; Multiple Regression Analysis 1. Introduction Environmental, Social, and Governance (ESG) criteria assess a company's commitment to sustainable and ethical practices. Environmental factors focus on how a company manages its relation with natural resources and climate such as greenhouse gas emissions, water conservation, energy efficiency (Eccles & Klimenko, 2023). Social factors evaluate the company's interactions with stakeholders, including labor conditions and community engagement (Sullivan & Mackenzie, 2024). Governance factors pertain to the company's management practices, such as board diversity and World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3743 executive compensation (Grewal & Hauptmann, 2024). ESG considerations are crucial in investment decisions and have been shown to influence profitability (Kotsantonis, et al., 2024). The integration of Environmental, Social and Governance (ESG) criteria into corporate strategies has gained significant attention as stakeholders increasingly demand sustainable and responsible business practices. ESG encompasses a range of factors including environmental, social responsibility, and corporate governance, all of which are believed to influence a firm’s profitability (Khan, et al., 2023). According to (Ruan & Liu, 2021), increasingly noticeable environmental, social and governance risks and problems have made more and more companies and regulatory agencies realize the importance of environmental, social, and governance (ESG) activities. Apart from the growing importance of ESG to investors and other stakeholders, there is evidence that ESG does enhance the profitability of firms. For example, In Germany, in a near-exhaustive examination, (Friede, et al., 2015) investigated the relationship between ESG and profitability based on aggregated evidence from more than 2000 empirical studies and found that more than 50% of studies have a non-negative ESG and corporate profitability relation. According to (Kell, 2018), a study on ESG and market performance found that operating with an ESG-oriented approach has been a strategy adopted by many entities and proves that stocks of sustainable companies tend to outperform their less sustainable counterparts (Kell, 2018). Similarly, In Russia, a study conducted by (Koroleva, et al., 2020) established from the results that companies that comply with ESG principles demonstrate significantly better profitability than other companies. The stakeholder theory supports the adoption of ESG initiatives and signals that the company is stakeholderfocused and manages its operations sustainably for the long-term which translates into superior economic returns over time. However, there are also contrasting views against the ESG concept. Some scholars argue that investments in ESG areas represent additional costs that can negatively affect profitability. In addition, critics worry that ESG is a distraction from the corporate imperative to focus on return on investment (ROI) and financial growth. For example, a study conducted by (Sukanya, et al., 2015) found a negative relationship between CSR practices and corporate profitability which was attributed to the additional costs of undertaking CSR activities that do not enhance or contribute to shareholder value. The more a firm becomes more socially responsible, the more difficult it becomes for it to increase its economic profits, as it cannot readily engage in projects without assessing their implications for ESG frontiers (Sukanya, et al., 2015). According to (Ruan & Liu, 2021), there is still no consensus as to whether ESG activities have promoted or negatively affected corporate profitability. This study therefore focuses specifically on assessing the relationship between ESG initiatives and the profitability of a firm, in the case, Zambian Breweries Plc. Zambian Breweries Plc, listed on the Lusaka Securities Exchange (LuSE), operates in the beverage manufacturing industry and is part of a multinational giant. Zambian Breweries Plc is one of the pioneers in CSR and sustainability programs in Zambia with substantial investments in environmental protection, safety standards, responsible drinking initiatives and community upliftment over the past decade (Zambian Breweries, 2023). Understanding whether ESG practices result in superior profitability is an important research question, especially in the context of a developing country like Zambia with different socio-economic dynamics compared to western economies where most empirical studies have been conducted so far. Evidence from Zambian Breweries Plc's example which operates in the beverage manufacturing industry where empirical research of this nature has not yet been conducted can potentially highlight incentives for other Zambian companies across sectors, especially in the beverage manufacturing industry to adopt ESG practices whilst also contributing insights for policymakers seeking to formulate relevant guidelines or regulations around responsible business practices. The specific relationship of ESG on profitability in Zambia, and particularly in the beverage manufacturing industry like brewing remains under-explored. For instance, (Munyati, 2024) pointed out that the relationship of ESG on corporate profitability is an emerging area of research, particularly in sectors like brewing, where environmental and social factors are increasingly scrutinized. Therefore, this study seeks to address this gap by examining the relationship of ESG on the profitability of Zambian Breweries Plc, contributing valuable insights to both academic literature and industry practice. World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3744 1.1. Study objectives The research questions that guided this study were as follows: • To establish the relationship between Environmental, Social and Governance (ESG) initiatives and profitability of Zambian Breweries. • To explore the challenges that Zambian Breweries experiences in implementing Environmental, Social and Governance (ESG) initiatives. • To identify strategies that can enhance the implementation of ESG initiatives for improved profitability at Zambian Breweries. 1.2. Theoretical Framework The following theories were adopted in the study. 1.2.1. Stakeholder Theory Stakeholder theory asserts that businesses should prioritize the interests of all stakeholders—such as employees, customers, suppliers, communities, and the environment—rather than focusing solely on shareholders (Barney & Hesterly, 2015). By integrating Environmental, Social, and Governance (ESG) considerations into their strategies, companies can strengthen stakeholder relationships, enhance brand reputation, and reduce risks related to regulatory compliance and public perception. Research indicates that firms with strong stakeholder relations can sustain profits and improve their positions, highlighting the theory's emphasis on creating value for all stakeholders to ensure longterm business sustainability. In the context of Zambian Breweries, the theory underscores the importance of ESG initiatives in meeting stakeholder expectations, suggesting that environmentally sustainable practices can lead to increased loyalty, sales, and profitability. 1.2.2. Resource-Based View Theory The Resource-Based View (RBV) theory posits that a firm's competitive advantage and profitability stem from its unique resources and capabilities (Barney & Hesterly, 2015). This perspective suggests that companies can leverage intangible assets related to ESG practices to create value and achieve a competitive edge. The RBV emphasizes the importance of dynamic capabilities that allow firms to adapt to changing ESG requirements and seize new opportunities. For instance, research indicates that ESG factors can serve as rare and difficult-to-imitate resources that enhance performance. In the case of Zambian Breweries, effective ESG initiatives are viewed as valuable resources that can differentiate the firm in the beverage market, improve operational efficiency, and attract investments, ultimately leading to better profitability compared to competitors who do not prioritize sustainability. 1.2.3. Agency Theory Agency theory examines the relationship between principals (shareholders) and agents (management), focusing on how conflicts of interest can impact decision-making and firm performance (Velte, 2017). In the context of ESG factors, it suggests that management may prioritize personal interests over shareholder concerns, potentially neglecting longterm sustainability. Studies show that firms with strong ESG performance tend to achieve better long-term profitability, indicating that aligning management incentives with ESG goals can reduce agency conflicts and enhance shareholder value. Furthermore, companies with independent and diverse boards are more likely to integrate ESG considerations into decision-making, leading to improved profitability. Within Zambian Breweries, agency theory provides a framework for understanding how commitment to ESG initiatives can foster transparency and ethical practices, aligning management actions with shareholder interests and potentially enhancing profitability through reduced agency costs. 1.3. Conceptual Framework of the Study Based on the review of empirical studies and underlying theoretical foundations, a conceptual model is presented below linking ESG practices as the independent variables with profitability as the dependent variable. World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3745 Figure 1 Conceptual Framework 2. Literature Review 2.1. Overview of Zambian Breweries Zambian Breweries, a subsidiary of AB InBev, is a leading beverage manufacturing firm in Zambia, established in 1964. As one of the largest producers of beer and soft drinks in the country, Zambian Breweries has played a pivotal role in the local economy by creating jobs and supporting local agriculture through its procurement of raw materials, particularly maize and sorghum (Zambian Breweries, 2023). The company operates several production facilities, including its main plant located in Lusaka, which is equipped with state-of-the-art technology to ensure high-quality production standards while adhering to international best practices. In recent years, Zambian Breweries has increasingly focused on integrating Environmental, Social, and Governance (ESG) initiatives into its operational framework. This commitment is reflected in the company’s sustainability strategy, which aims to reduce its environmental footprint, enhance community engagement, and ensure robust governance practices. According to the Zambia Environmental Management Agency (ZEMA), Zambian Breweries has implemented various environmental initiatives, including water conservation programs and waste management practices that align with national regulations and international sustainability goals (ZEMA, 2023). These initiatives not only contribute to environmental sustainability but also enhance the company's reputation among stakeholders. The profitability of Zambian Breweries is closely linked to its ESG initiatives. Studies have shown that companies that adopt sustainable business practices often experience improved profitability (Kotsantonis, et al., 2024). Zambian Breweries has reported that its investment in sustainable practices has led to cost savings, particularly in water and energy consumption, which in turn positively relates to profitability (Zambian Breweries, 2023). By aligning its business strategy with ESG principles, the company aims to create long-term value for its shareholders while addressing the growing concerns of consumers regarding corporate responsibility. Moreover, Zambian Breweries actively engages with local communities through various social initiatives. The company has launched programs aimed at promoting responsible drinking and supporting local development projects, such as education and health initiatives (Zambian Breweries, 2023). These efforts not only enhance the company’s social license to operate but also foster goodwill among consumers and local communities, ultimately contributing to brand loyalty and market share. As noted by (Munyati, 2024), companies that prioritize social responsibility tend to build stronger relationships with their stakeholders, which can lead to enhanced profitability. In a nutshell, Zambian Breweries exemplifies a commitment to integrating ESG initiatives into its core business operations. By focusing on environmental sustainability, social responsibility, and effective governance, the company aims to explore the challenges of the modern business landscape while enhancing its profitability. This study will assess World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3746 the relationship between these ESG initiatives and the profitability of Zambian Breweries, contributing valuable insights to the understanding of sustainability practices in the beverage manufacturing sector in Zambia 2.2. Environmental, Social and Governance (ESG) Initiatives and profitability The section below provides literature review on the relationship between Environmental, Social and Governance (ESG) Initiatives and the profitability. 2.2.1. Environmental initiatives and profitability Global Perspective Empirical studies have yielded mixed results regarding the relationship between environmental performance and financial performance. Several meta-analyses have found a positive association between environmental practices and financial metrics such as return on assets (ROA), return on equity (ROE), and stock market performance (Endrikat et al., 2014). However, other studies have reported negative or insignificant relationships, suggesting that the costs of environmental initiatives may outweigh their benefits. For example, in a study conducted by (Xie, et al., 2018), the findings show that not all environmental policies will improve financial performance. Further, (Xie, et al., 2018) found that firms that choose to use the sustainable packaging policy are more likely to have higher ROA and market value. However, activities such as emission-reduction initiatives, climate change policy, and discussion of climate change opportunities and risks and new products related to climate change and energy efficiency policy have no significant relationship with corporate efficiency, ROA, or market value (Xie, et al., 2018). Furthermore, (Xie, et al., 2018) also observed that a green building policy is positively associated with both corporate efficiency and ROA. Improvement in financial performance occurs only if the policy aims to enhance environmental performance with any potential profit higher than the additional cost (Xie, et al., 2018). In Indonesia, (Susilawati, et al., 2023) investigated the influence of CSR and environmental performance on financial performance using multiple regression techniques and found that environmental performance, shows a positive influence on financial performance. According to (Susilawati, et al., 2023), this result was attributed to effective industrial waste management practices implemented by the sampled companies in this study. Consequently, (Susilawati, et al., 2023) claimed that the enhancement of industrial waste management leads to a competitive advantage and ultimately drives increased company profits. In Germany, (Trumpp & Guenther, 2015) explored the u-shaped relationship between corporate environmental performance and corporate financial performance and found empirical evidence of a non-linear, specifically a U-shaped relationship between carbon performance and profitability as well as between waste intensity and profitability. Regarding the findings, (Trumpp & Guenther, 2015) asserted that it pays to be green only after exceeding a minimum level of corporate environmental performance. In Romania, (Dobre, et al., 2015) investigated the influence of environmental and social performance on financial performance evidenced from Romania’s listed entities and found that there is a significant effect of increasing water, air and soil protection on financial performance measured by ROE, but the effect is negative. Contrary to (Susilawati, et al., 2023), (Dobre, et al., 2015) found that other environmental factors such as waste policy, energy, gas, soil and sound pollution improvements have no influence on the financial performance measured by ROE. In China, (Song, et al., 2017) examined the relationship between environmental management and financial performance of Chinese listed firms from 2007 to 2011 and found that environmental management is significantly and positively related to financial performance in the subsequent years, implying that environmental management can significantly improve future profitability. Further, (Song, et al., 2017) mentioned that environmental investment consumes capital and resources, hence results in their study indicate that environmental management is not significantly related to improved financial performance in the current year. In a study conducted by (Lee, et al., 2014), it was found that there is a significant positive relationship between environmental responsibility and financial performance (ROE) at the firm level, and between environmental responsibility and operational performance at the firm level. For dependent variables (Lee, et al., 2014) used ROE to measure financial performance, and ROA to measure operating performance. For the independent variable (environmental responsibility), (Lee, et al., 2014) used environmental strategy, environmental organization, environmental management, environmental performance, environmental correspondence (stakeholder) and total environmental evaluation score as proxy variables. Contrary to the findings of (Xie, et al., 2018), a study conducted by (Batae, et al., 2020) found that the only environmental dimension that is correlated with or has a positive relationship on financial performance refers to emissions and waste reduction. Contrary to the finding of (Batae, et al., 2020), a study conducted by (Khoury, et al., 2021) in which the environmental responsibility pillar was derived from a predetermined weighted score on indicators related to emission, World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3747 innovation and resource use found a negative relationship between environmental initiatives and financial performance. Environmental initiatives only affect accounting performance (ROA/ROE) with a convex relationship, illustrating the presence of a U-shaped relationship (Khoury, et al., 2021). More specifically, while a negative relationship between environmental initiatives and accounting performance (ROA/ROE) may occur at an early stage, there is a turning point after which the relationship becomes positive (Khoury, et al., 2021). This recommends that improving environmental responsibility is a procedure that takes a long time to reap its benefits (Khoury, et al., 2021). The findings in this study conducted by (Khoury, et al., 2021) are similar to the findings in another study conducted by (Trumpp & Guenther, 2015) in which they explored the U-shaped relationship between corporate environmental performance and corporate financial performance and found empirical evidence of a non-linear, specifically a U-shaped relationship between carbon performance and profitability as well as between waste intensity and profitability. Similar to (Khoury, et al., 2021), (Trumpp & Guenther, 2015) concluded that it pays to be green only after exceeding a minimum level of corporate environmental performance. Another study conducted by (Shaikh, 2021) shows statistical evidence that environmental disclosure and return on assets (ROA) are adversely (negatively) associated. It’s evident that when companies decide to practice sustainability, they need to employ more financial resources in terms of non-monetary assets, which results in an increased amount of capital expenditure (CAPEX) and a considerable amount of operational overhead (Shaikh, 2021). During the initial fiscal years of sustainability practice, the undertaking’s profitability shrinks due to increased overheads (Shaikh, 2021). The assertions made by (Shaikh, 2021) regarding the shrinkage of profitability due to increased capital expenditure in the initial fiscal years of sustainability practice are similar to those of (Khoury, et al., 2021), (Trumpp & Guenther, 2015) and (Song, et al., 2017) in their findings. Furthermore, all four (4) scholars report in their findings that even though environmental activities are costly in the initial stages and relate negatively on financial performance, they eventually influence improved financial performance of a firm in the long run; hence the convex (u-shaped) relationship between the two variables (environmental initiatives and financial performance). In Greece, (Triantafyllidou, 2021) investigated the relationship between the ESG criterion and the financial performance of a company and found a negative correlation between the environmental pillar and financial performance. According to (Xie, et al., 2018), the strength and nature of the relationship between environmental initiatives and financial performance of a firm may depend on various factors, including the specific environmental initiatives implemented, the industry sector, the geographic context, and the time frame considered. African Perspective In the African context, research on the relationship between environmental initiatives and financial performance is relatively limited compared to developed regions. However, several studies have contributed to the understanding of this relationship within the unique environmental and socio-economic challenges faced by African countries. A study conducted by (Dzomonda & Fatoki, 2020) in which environmental compliance and carbon emission reduction were used as parameters for environmental sustainability found that there is a significant positive relationship between both parameters (environmental compliance and carbon emission reduction) and financial performance. Further, (Dzomonda & Fatoki, 2020) postulated that being a compliant business in terms of environmental requirements such as ISO 14001 and internal environmental policies may increase the profitability of the business as measured by EPS (Equity per Share). On the contrary, a study conducted by (Botchwey, et al., 2022), found that environmental initiatives (energy consumption, waste management, emissions) and return on assets (ROA) as a measure of financial performance did not establish any significant relationship between the two variables. Environmental reporting includes disclosing sustainability indicators such as energy consumption, waste management, emissions, and biodiversity (Botchwey, et al., 2022). Local (Zambian) Perspective Research specifically focused on the relationship between environmental initiatives and financial performance in the Zambian context is limited. However, some studies have explored broader environmental issues and their implications for businesses operating in Zambia. In Zambia, (Mwanza & Chinyonga, 2024) investigated the relationship of sustainability accounting and reporting on firm value, a case of listed companies on Lusaka Stock Exchange (LUSE). Based on the results, (Mwanza & Chinyonga, 2024) concluded that there is an increase in environmental sustainability activities of listed companies which has a positive and significant effect on the firm value (ROA). Similarly, in Zambia, (Choongo, 2017) conducted a longitudinal study on the relationship of corporate social responsibility on firm performance of SMEs in Zambia, the results show that the two dimensions of CSR (social and environmental) significantly and positively relationship financial performance. In the context of Zambian Breweries Plc, the company has published sustainability reports highlighting its environmental initiatives, such as water stewardship, energy World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3748 efficiency, and waste reduction programs. However, there is a lack of empirical research specifically examining the relationship of these initiatives on the company's financial performance. 2.2.2. Social initiatives and profitability The relationship between social initiatives and financial performance has been extensively studied globally, with researchers drawing upon various theoretical frameworks, including stakeholder theory, the resource-based view, resource dependency theory and the legitimacy theory. Global Perspective Empirical studies have produced mixed findings regarding the relationship between social initiatives and financial performance. Several meta-analyses and literature reviews have reported a positive association between social initiatives and various financial metrics, such as return on assets (ROA), return on equity (ROE), and stock market performance (Choi & Wang, 2016). In a study conducted by (Shakil, et al., 2019), a positive association of environmental and social performance with the financial performance of banks in emerging countries was established. Similar to the findings by (Shakil, et al., 2019), a study conducted by (Velte, 2017) using the multivariate regression analysis provided that both the total Environmental, Social and Governance (ESG) performance and the three components ( Governance, Environment and Social) are positively and significantly related to ROA as accounting-based variable of financial performance. In Sweden, (Chen, et al., 2015) investigated the relationship between disclosures of corporate social performance and financial performance evidenced from GRI reports in the manufacturing industry and found that labor practices and decent work performance indicators, which are occupational health and safety and equal remuneration for women and men are positively and significantly correlated with ROE. Further, (Chen, et al., 2015) found that human rights performance indicators, which are investment and procurement practices are significantly correlated with ROE. Furthermore, (Chen, et al., 2015) found that in society performance indicators analysis, compliance is positively and significantly correlated with ROE. Lastly, in product responsibility performance indicators, which is marketing communications, (Chen, et al., 2015) found that it has a positive and significant correlation with ROE. In a study conducted by (Cho, et al., 2019), six evaluation items were used, namely; soundness, fairness, contribution to social service, consumer protection satisfaction, environmental protection satisfaction, and employee satisfaction as the variables of CSR (independent variable) and ROA was chosen as a proxy variable for financial performance to measure profitability. In this study (Cho, et al., 2019) found that in the correlation between CSR performance and profitability (ROA), only fairness, contribution to social service, consumer protection satisfaction, and employee satisfaction (social contribution) has a positive relationship with financial performance at a significant level. On the other hand, (Cho, et al., 2019) asserted that while soundness and environmental protection (environmental contribution) have a positive relationship with ROA, they are not statistically significant. However, other studies have found negative or insignificant relationships, suggesting that the costs of social initiatives may outweigh their benefits or that the relationship is complex and context-dependent. For instance, a study conducted by (Khoury, et al., 2021), found that the social pillar displayed a concave relationship with accounting measures i.e., return on assets (ROA). According to (Khoury, et al., 2021), this suggested that a better social pillar is associated with a better short run financial performance, while an augmented social pillar is associated with a lower company financial performance in the long run. Conversely, in another study conducted by (Shaikh, 2021), it was found that social disclosures contribute adversely (negatively) to corporate financial performance. In Greece, (Triantafyllidou, 2021) investigated the relationship between the ESG criterion and financial performance of a company and found no relation between the social pillar and financial performance. African Perspective In the African context, research on the relationship between social initiatives and financial performance is relatively limited compared to developed regions. However, several studies have explored this relationship within the unique socio-economic challenges and cultural contexts of African countries. In Kenya, (Agutu & Githira, 2023) investigated the relationship between sustainability reporting and financial performance of listed financial firms. The results in this study show that social sustainability reporting has a positive and significant influence on the financial performance of listed financial firms in Kenya. Further, (Agutu & Githira, 2023) pointed out that institutions should focus on social sustainability to improve financial performance through improved reputation and legitimacy, increased employee and customer’s loyalty, and enhanced brand value. Increasing social sustainability initiatives, which culminate in high reporting scores, will translate into improved financial performance and a higher return on equity. A study conducted by (Botchwey, et al., 2022), stated that the social dimension of sustainability entails disclosures on human resources, labor practices, relationship on society, and corporate social World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3749 responsibility. Similar to the findings of (Agutu & Githira, 2023), the results in this study conducted by (Botchwey, et al., 2022) indicate that the social sustainability has a significant favorable influence on financial performance and firm value. Local (Zambian) Perspective Research specifically focused on the relationship between social initiatives and financial performance in the Zambian context is limited. However, some studies have explored broader social issues and their implications for businesses operating in Zambia. In a study conducted by (Mwanza & Chinyonga, 2024), the findings indicated that there was a weak association between the dependent variable (ROA) and the independent variables (environmental and social sustainability). Furthermore, in a longitudinal study conducted by (Choongo, 2017), the analysis results showed that the two dimensions of CSR (social and environmental) significantly relationship financial performance. In the context of Zambian Breweries Plc, the company has published sustainability reports highlighting its environmental, social and governance initiatives, such as community development programs, employee training and development, and responsible drinking campaigns, etc. However, there is a lack of empirical research specifically examining the relationship between these environmental, social and governance (ESG) initiatives and the company's financial performance. 2.2.3. Governance initiatives and profitability The relationship between corporate governance practices and financial performance has been extensively studied globally, with researchers drawing upon various theoretical frameworks, including agency theory, resource dependency theory and stakeholder theory. Global Perspective Empirical studies have produced mixed findings regarding the relationship between corporate governance practices and financial performance. Several meta-analyses and literature reviews have reported a positive association between various governance mechanisms, such as board independence, CEO/Chair duality, and ownership concentration, and financial metrics like return on assets (ROA), return on equity (ROE), and Tobin's Q. For instance, a study conducted by (Tan, et al., 2016), CEO/Chairman duality, board size and presence of independent directors were used as proxies of the corporate governance as the independent variable. In this study by (Tan, et al., 2016) the dependent variable was financial performance which was measured by return on assets (ROA), return on equity (ROE) and Tobin’s Q. (Tan, et al., 2016) found that there is a statistically strong and positive relationship between CEO/Chairman duality and financial performance. Further, (Tan, et al., 2016) found a strong and positive relationship between board size and ROA and ROE. However, (Tan, et al., 2016) found that presence of independent directors is negatively correlated with ROA and ROE. According to (Tan, et al., 2016) the negative correlation between presence of independent directors and ROA and ROE suggests that independent directors do not definitely result in good firm performance. Similar to the findings of (Tan, et al., 2016), results in a study conducted by (Kalsie & Shrivastav, 2016) using the fixed effect model, random effect model and feasible generalized least square (FGLS) regression models, concluded that the board size has a positive and significant relationship on the firm performance. Further, (Kalsie & Shrivastav, 2016) pointed out that existing literature on board size is based on different theories of corporate governance. While agency theory and resource dependency theory suggest that the board size positively affects performance, stewardship theory favors smaller board size and argues that larger board size negatively relationships the firm performance (Kalsie & Shrivastav, 2016). Similar results in a study by (Yasser, et al., 2014) show a positive relationship between the board size, minority representation in board, and family director’s in-board and firm performance. In a study conducted by (Yang & Zhao, 2014), it was revealed that the main argument against CEO duality (or dual leadership) is based on agency theory, which predicts that CEOs, as agents of shareholders, do not always act in the best interests of shareholders. In another study by (Amba, 2014), it was pointed out that CEO duality means that the CEO is also holding a position as a chairman of the board of directors. Agency theorists argue that when a board chairman is also a CEO, he will gain sufficient controlling power to gain more private benefits (Amba, 2014). The study conducted by (Amba, 2014) examined the influence of corporate governance variables (CEO duality, Chairman of Audit Committee, Proportion of Non-executive Directors, Concentrated Ownership structure, Institutional Investors, Gearing Ratio) on firms’ financial performance (Return on Assets) using the firms traded in Bahrain bourse. World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3750 In this study, (Amba, 2014) found that CEO duality has a negative relationship on ROA and creates additional agency costs and impairs performance. In this study, (Amba, 2014) found that Board of director being the chair of audit committee has positive effect on performance and contributes to transparent and well audited financial reports. Further in this study, (Amba, 2014) found that proportion of non-executive directors has a negative influence on return on assets (ROA) signaling the higher the proportion of non-executive directors (NED) the lower the firm’s financial performance. This indicates the need of optimum proportion of non-executive directors in the board for effective governance and improved financial performance of the firm (Amba, 2014). Furthermore, (Amba, 2014) found that the proportion of institutional ownership in the capital structure positively affects the firm’s financial performance. As institutional owners are more concerned about returns on their investments, they are perceived to contribute to effective corporate governance of the firm which enhances firms’ financial performance (Amba, 2014). Finally, (Amba, 2014) found that the gearing ratio is statistically significant to corporate governance with a negative relationship with firms’ financial performance. As debt holders control corporations with covenants in their contracts may impair the aggressive strategies of the management in pursuit of financial excellence. In Canada, (Kim & Li, 2021) studied the relationship of ESG practices in corporate finance and found that corporate governance has the most significant and positive influence on financial performance. Another study carried out by (Rossi, et al., 2015) ascertained that corporate governance has a positive relationship with financial performance. The analysis in this study by (Rossi, et al., 2015) reported that a better protection of shareholders (e.g. one share one vote, prohibition of poison pills, etc.), an appropriate composition of the board of directors (in terms of presence of independent directors and internal committees, gender and professional diversity, etc.) and an appropriate remuneration policy (e.g. limits to variable components of remuneration, mechanisms of share retention and lock up, etc.) lead to better financial performance. In Russia, a study conducted by (Koroleva, et al., 2020) established from the results that companies that comply with ESG principles demonstrate significantly better financial performance than other companies. From the results, (Koroleva, et al., 2020) asserted that the governance factor is more strongly related to company performance, thus providing implications for companies' policymakers in terms of the utility of adopting ESG information. In Greece, (Triantafyllidou, 2021) investigated the relationship between the ESG criteria and the financial performance of a company and found a positive correlation only between the governance pillar and financial performance. However, other studies have found negative or insignificant relationships, suggesting that the relationship is complex and context-dependent. For example, as per the study conducted by (Jordi, et al., 2018), the results suggest that the variables of interest (i.e., ownership dispersion, board members, and dividend) have no significant effect on financial performance (ROE). In Malaysia, (Shakil, et al., 2019) investigated whether environmental, social and governance performance affects the financial performance of banks in a cross – country study of emerging market banks and found that governance performance does not influence financial performance. Another study conducted by (Zahid, et al., 2022) established that ESG has a significantly negative effect on a firm's financial performance as measured by the return on assets (ROA), supporting the trade-off hypothesis in which investing in ESG activities increases the cost of business. However, (Zahid, et al., 2022) reported that ESG has a significantly positive effect on revenue, suggesting that customers are more attracted to firms that invest in ESG. Customers’ attraction to firms that invest in ESG fulfils the aim of the stakeholder and legitimacy theories. The strength and nature of the relationship may depend on various factors, including the specific governance mechanisms implemented, the industry sector, the geographic context, and the time frame considered. For instance, studies have found that the relationship of board independence on financial performance may vary across countries with different legal and institutional environments (Aguilera et al., 2008). African Perspective In the African context, research on the relationship between corporate governance practices and financial performance is relatively limited compared to developed regions. However, several studies have explored this relationship within the unique institutional and cultural contexts of African countries. A study conducted in Egypt by (Shahwan, 2015) found that there was an insignificant relationship between corporate governance practices and financial performance. The analysis in the study by (Shahwan, 2015) reported that the two proxy variables for corporate governance (Ownership concentration and institutional ownership) were unrelated to firm performance. However, leverage as a proxy of financial risk turns out to be positively associated with firm performance (Shahwan, 2015). This result sheds light on the nature of the capital structure of Egyptian firms which heavily rely on debt financing (Shahwan, 2015). To enhance the function of debt as a control device in an emerging economy like Egypt, substantial effort should be directed not only to developing corporate governance practices but also to providing additional legal protection for creditors’ interests (Shahwan, 2015). In South Africa, (Kemp, 2014) World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3757 Table 11 Extent of implementation of Governance initiatives (2021-2023) Initiatives VLE LE MLE SLE ME SHE MHE SVHE MVHE VHE Mean Standard Deviation To what extent do you think board diversity and inclusion initiatives were implemented from 2021 to 2023 0 0 4 16 8 16 44 12 46 0 7.05 1.76 To what extent do you think independent board committees were implemented from 2021 to 2023 18 4 20 24 24 40 8 4 4 0 4.21 1.93 To what extent do you think ethical business practices were implemented from 2021 to 2023 4 12 16 12 0 16 32 14 32 8 6.32 2.71 The governance initiatives table shows varied levels of implementation and perception. Board diversity and inclusion initiatives received strong support, especially with significant responses in the "Moderately High Extent" (44, mean: 7.05, SD: 1.76) and "Moderately Very High Extent" (46) categories. The effectiveness of independent board committees appears more challenging, with a considerable number indicating "Very Low Extent" to “Moderately Low Extent”, (mean: 4.21, SD: 1.93), revealing potential concerns about governance structures. Meanwhile, ethical business practices enjoy a moderately positive perception, with significant agreement in the "Moderately High Extent (32)" and "Moderately Very High Extent" (32) categories, (mean: 6.32, SD: 2.71) yet still indicating a need for ongoing vigilance. This highlights areas of strength in governance, specifically in board diversity and inclusion as well as ethical business practices, while also pointing out challenges that require attention to enhance overall governance effectiveness. 4.2. Trend analysis on the extent of ESG implementation and the profitability of Zambian Breweries Plc (2021 – 2023) Table 12 The Extent of implementation of ESG initiatives and profitability (2021-2023) Year Total Assets Total Income ROA (%) Environmental Initiatives Social Initiatives Governance Initiatives 2021 3,578,033 147,952 4.13 Low Moderate Low 2022 4,798,734 99,248 2.07 Moderate Low Moderate 2023 5,977,857 535,601 - 8.95 High High Moderate This table illustrates the relationship between financial performance, as measured by Return on Assets (ROA), and the varying levels of Environmental, Social, and Governance (ESG) initiatives over the years for Zambian Breweries. Notably, the ROA shows a declining trend from 2021 to 2022, dropping from 4.13% to 2.07%. This decline coincides with moderate environmental initiatives and low social initiatives during this period. However, in 2023, there is a significant shift as the ROA turns negative at -8.95%, despite the company implementing high levels of environmental and social initiatives. This unexpected downturn in financial performance raises questions about the effectiveness of these initiatives in that year. The negative ROA in 2023 suggests that while robust ESG practices are generally associated with improved financial outcomes, other factors may have adversely affected the company's performance during that period. This pattern indicates that while effective ESG initiatives can enhance financial performance, they may not always guarantee positive results, particularly if external challenges or operational issues arise. Further investigation is needed to understand the underlying causes of the negative ROA despite strong ESG commitments. World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3758 Table 13 Environmental initiatives Statement Strongly Disagree Disagree Neutral Agree Strongly Agree Mean Standard Deviation The company effectively manages its waste to minimize environmental degradation. 4 22 12 50 58 3.74 1.12 The company actively implements resource conservation practices in its operations. 0 12 60 42 32 3.16 1.03 The company has initiatives in place to reduce pollution from its manufacturing processes. 0 36 40 54 16 2.44 1.33 The company demonstrates a generally positive perception regarding its environmental initiatives, particularly in waste management and compliance with environmental regulations. A significant majority agree or strongly agree that the company effectively manages its waste to minimize environmental degradation (50 Agree, 58 Strongly Agree, mean: 3.74, SD: 1.12). However, there are concerns regarding the implementation of resource conservation practices, as a substantial portion of participants remain neutral (60 Neutral, mean: 3.16, SD: 1.03), indicating a potential need for improved communication or visibility around these efforts. Additionally, the company’s initiatives to reduce pollution from manufacturing processes received lower overall support (54 Agree, 16 Strongly Agree, mean: 2.44, SD: 1.33). These results suggest that while environmental initiatives positively affect perceptions of corporate social responsibility, there are areas requiring attention to enhance clarity and effectiveness. Table 14 Social initiatives Statement Strongly Disagree Disagree Neutral Agree Strongly Agree Mean Standard Deviation The company actively engages with local communities to address their needs and concerns. 12 22 32 48 32 3.24 0.97 The company prioritizes employee welfare and satisfaction in its policies. 8 16 36 60 26 3.28 0.92 The company promotes diversity and inclusion within its workforce. 0 12 10 48 76 4.38 0.79 The company ensures a safe and healthy working environment for all employees. 6 8 20 82 30 3.58 0.84 The company contributes to social causes and charitable initiatives. 6 6 20 46 68 3.76 0.91 The social initiatives are generally perceived favorably, with substantial agreement on employee welfare and community engagement. Most participants reacted positively regarding the company’s engagement with local communities (48 Agree, 32 Strongly Agree, mean: 3.24, SD: 0.97) and employee welfare (60 Agree, 26 Strongly Agree, mean: 3.28, SD: 0.92), indicating strong alignment between the company’s policies and employee satisfaction. The promotion of diversity and inclusion within the workforce receives overwhelming support (48 Agree, 76 Strongly Agree, mean: 4.38, SD: 0.79), showcasing a strong commitment to inclusivity. Despite this positive outlook, there are notably high "Neutral" responses for community engagement and workforce initiatives, suggesting areas where further engagement and clarity may be necessary. Notably, these social initiatives significantly contribute to perceived employee and community relations. World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3759 Table 15 Governance initiatives Statement Strongly Disagree Disagree Neutral Agree Strongly Agree Mean Standard Deviation The company operates with high ethical standards in its business practices. 0 28 20 66 32 3.76 0.97 The company maintains transparency in its financial reporting and governance practices. 0 0 42 88 16 4.10 0.64 The company has a diverse board that reflects different perspectives and experiences. 6 6 38 56 40 3.74 0.88 The company actively engages stakeholders in decision-making processes. 12 12 64 34 24 2.92 0.92 The company complies with all relevant laws and regulations governing its operations. 0 14 42 78 12 3.56 0.84 The governance initiatives reflect varying levels of confidence among participants. Transparency in financial reporting is viewed very positively, with a majority agreeing (88 Agree, mean: 4.10, SD: 0.64) that the company maintains strong practices in this area. There is also a favorable perception of the company’s ethical standards, with 66 participants agreeing that it operates ethically (mean: 3.76, SD: 0.97). However, there is ambivalence regarding stakeholder engagement, as evidenced by 64 participants expressing neutrality (mean: 2.92, SD: 0.92). While the diverse board is rated positively, with 56 participants agreeing (mean: 3.74, SD: 0.88), there remains room for improvement in enhancing stakeholder involvement in decision-making processes. Overall, these findings highlight strengths in governance practices, particularly in transparency and ethics, while indicating areas for further development. 4.3. The challenges that Zambian Breweries Plc experiences in implementing Environmental, Social and Governance (ESG) initiatives Table 16 Challenges in implementing ESG Initiatives at Zambian Breweries Plc Category Challenge Frequency Percent Environmental Insufficient knowledge or expertise 56 38.4 Limited access to sustainable materials 30 20.5 Resistance from employees or management 16 11.0 Resistance to change 44 30.1 Social Difficulty measuring social relationship 12 8.2 Inadequate stakeholder engagement 90 61.6 Insufficient knowledge or expertise 40 27.4 Resistance to change 4 2.7 Governance Insufficient knowledge or expertise 32 21.9 Regulatory compliance issues 62 42.5 Resistance from employees or management 52 35.6 The implementation of Environmental, Social, and Governance (ESG) initiatives at Zambian Breweries faces several significant challenges. For environmental initiatives, the primary obstacle is insufficient knowledge or expertise, affecting 38.4% of participants, followed by resistance to change (30.1%) and limited access to sustainable materials (20.5%). In social initiatives, inadequate stakeholder engagement is the most pressing issue, reported by 61.6%, along with insufficient knowledge (27.4%) and difficulties in measuring social relationships (8.2%). Governance challenges are largely centered around regulatory compliance issues (42.5%), resistance from employees or management (35.6%), World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3760 and a lack of knowledge (21.9%). These findings highlight the need for enhanced knowledge, stakeholder engagement, and a supportive culture to effectively implement ESG initiatives. 4.3.1. Thematic Analysis of the challenges in Implementing ESG Initiatives at Zambian Breweries Plc. Given the exploratory nature of the second objective of this study, thematic analysis was conducted on data collected from five (5) key informants with extensive experience in ESG implementation at Zambian Breweries Plc. While the sample size is small, these informants provide deep knowledge, complementing the broader quantitative findings from the larger questionnaire sample. Knowledge and Expertise Gaps A prominent theme emerging from the data is insufficient knowledge or expertise, which impedes the effective implementation of ESG initiatives across all three categories. In the environmental sphere, 38.4% of participants cited this as a significant challenge. One key informant stated that, "There is a clear need for specialized training; without it, our environmental strategies feel half-baked." (KI-1). In the social context, 27.4% acknowledged a lack of understanding regarding social relationship assessment, emphasizing the need to strengthen capabilities: for instance, another key informant stated that, "We don’t fully grasp our social metrics, making it difficult to convey our relationship to stakeholders."(KI-3). Similarly, in governance, 21.9% highlighted insufficient knowledge. One of the key informants stated that "without a solid grasp of governance issues, we risk non-compliance and inefficiency." (KI-5) Resistance to Change Resistance to change is another critical theme, particularly damaging as it can stall progress towards implementing necessary initiatives. In environmental efforts, 30.1% of participants expressed that change is often met with skepticism: One key informant stated that "Many team members prefer the status quo; we need a shift in mindset to move forward." (KI-2). In the social domain, although only 2.7% reported resistance, its presence still suggests that even minimal opposition can significantly relationship initiative adoption. In governance, 35.6% of participants highlighted similar sentiments. Related to these sentiments, one of the key informants stated that "Executive buy-in is crucial; without it, new governance strategies falter."(K1-1). This resistance underscores the necessity of cultivating a culture that embraces change and innovation. Stakeholder Engagement Deficiencies The lack of adequate stakeholder engagement emerges as a considerable hurdle, particularly in the social context, where 61.6% of participants noted it as a challenge. In line with this, one key informant lamented, "We’re not involving stakeholders early enough; their input is vital for the success of our social initiatives." (KI-3). This sentiment reflects a broader recognition that effective engagement leads to more relationship outcomes. Addressing this issue is critical, as stakeholders often hold valuable insights and resources that can enhance initiative effectiveness. Access to Sustainable Resources Furthermore, the theme of limited access to sustainable materials is relevant in environmental initiatives, cited by 20.5% of participants. In line with this, one key informant stated that, "Sourcing sustainable materials has been a logistical nightmare; we need more reliable suppliers." (KI-4). This limitation suggests systemic issues within supply chains that could obstruct the implementation of sustainable practices, highlighting the need for strategic partnerships and better resource management. Regulatory Compliance Challenges Finally, regulatory compliance issues stand out in the governance category, with 42.5% of participants reflecting on the difficulties navigating complex compliance requirements. A key informant stated, "Keeping up with regulatory changes is resource-intensive; we often feel overwhelmed." (KI-5). This concern illustrates the need for robust frameworks and support systems that can help organizations stay compliant while pursuing their ESG goals. World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3761 4.4. Recommendations of strategies on how Environmental, Social and Governance (ESG) initiatives could be enhanced for improved profitability of Zambian Breweries Plc Table 17 Recommendations of strategies to enhance ESG implementation for improved profitability Category Recommendation Frequency Percent Environmental Enhance staff training on environmental practices 62 42.5 Improve waste management practices 28 19.2 Increase investment in sustainable technologies 32 21.9 Implement regular environmental audits 12 8.2 Strengthen partnerships with environmental organizations 12 8.2 Social Increase community engagement efforts 52 35.6 Promote diversity and inclusion training 50 34.2 Collaborate with other stakeholders and organizations 16 11.0 Enhance employee welfare programs 16 11.0 Improve health and safety standards 8 5.5 Foster partnerships with local NGOs 4 2.7 Governance Increase transparency in decision-making 56 38.4 Strengthen ethical guidelines and practices 32 21.9 Conduct deliberate training programs for Board Directors 28 19.2 Enhance stakeholder engagement processes 8 5.5 Implement regular governance reviews 8 5.5 Diversify the board of directors 6 4.1 According to the findings in the table above, the following interpretations can be noted; the most significant recommendation is to enhance staff training on environmental practices (42.5%). This indicates a strong belief that increasing knowledge and skills in this area will directly relationship implementation success. Other key recommendations include improving waste management practices (19.2%) and increasing investment in sustainable technologies (21.9%). Together, these recommendations demonstrate a desire for both operational improvements and strategic investments to bolster environmental initiatives. For social initiatives, a focus on increasing community engagement efforts is paramount (35.6%) suggesting that actively connecting with communities can lead to better profitability. Additionally, promoting diversity and inclusion training (34.2%) reflects the importance placed on creating equitable workplaces. Collaborative efforts with stakeholders (11.0%) and enhancing employee welfare programs (11.0%,) are also recognized as valuable strategies. In governance, increasing transparency in decision-making (38.4%) is highlighted as a critical recommendation, indicating that clarity and openness can lead to stronger governance frameworks and better performance outcomes. Furthermore, strengthening ethical guidelines (21.9%) and conducting training for board directors (19.2%) demonstrate the need for a solid ethical foundation and informed leadership to navigate governance challenges effectively. 4.5. Thematic Analysis of the recommendations of strategies for enhancing the implementation of ESG Initiatives for improved profitability at Zambian Breweries Plc 4.5.1. Continuous Staff Development and Training A central theme in the environmental recommendations is the importance of staff training, particularly in environmental practices, which garnered 42.5% of responses. In line with this finding, one key informant emphasized by stating; "Enhancing our team’s understanding of environmental issues is crucial; without proper training, our initiatives World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3762 will lack coherence and effectiveness." (KI-1). This focus on education suggests that developing employees’ expertise is regarded as foundational for successful implementation of environmental initiatives. 4.5.2. Enhanced Community and Stakeholder Engagement In the social initiatives category, the emphasis on community engagement is a notable theme, with 35.6% advocating for increased efforts in this area. One participant highlighted, "Actively engaging with our community allows us to understand their needs better, ultimately driving our performance." This perspective underscores the belief that strong community ties can lead to improvements in profitability. The recommendation to promote diversity and inclusion training (34.2%) also reflects a commitment towards equitable workplace practices, with one key informant asserting, "Creating a diverse workforce will not only bring different perspectives but also strengthen our brand image." (KI-3). On the same premise, another key informant stated “Actively engaging with our community allows us to understand their needs better, ultimately driving our performance." (KI-4). The call for collaboration with other stakeholders (11.0%) and enhancing employee welfare programs (11.0%) indicates a holistic approach to social responsibility. A key informant stated, "Our employees are our greatest asset; investing in their well-being directly translates to improved productivity and company performance."(KI-2) 4.5.3. Governance through Transparency and Ethics The governance recommendations reveal a clear trend towards transparency and ethical practices, with 38.4% advocating for increased transparency in decision-making processes. A key informant articulated, "When decisions are made transparently, it builds trust among employees and stakeholders, leading to more robust governance." (KI-5). This focus on transparency is essential for building a trustworthy environment that fosters collaboration and integrity. Strengthening ethical guidelines (21.9%) and conducting deliberate training programs for board directors (19.2%) further emphasizes the necessity of solid ethical foundations for governance. As one key informant pointed out, "Ethical leadership is paramount; without it, our governance structures lack credibility." (KI-1) Additionally, the need to enhance stakeholder engagement processes (5.5%) and implement regular governance reviews (5.5%) indicates a recognition of the importance of ongoing dialogue and assessment in governance practices. A key informant summarized this sentiment by stating, "Regular reviews of our governance practices will help us stay aligned with our goals and ethical commitments."(KI-3) 4.5.4. Increasing Investments in Sustainable Technology Complementary recommendations include increasing investments in sustainable technologies (21.9%). In tandem with this, key informants remarked on this stating, "Investing in green technologies not only improves our practices but also presents us with a competitive edge in the market." (KI-2) 5. Discussion The analysis reveals a moderate positive relationship between ESG initiatives and profitability, with an R value of 0.406 and an R-Square of 0.165, indicating that ESG factors explain 16.5% of profitability variation. The ANOVA results confirm this relationship is statistically significant (p-value = 0.000). While environmental initiatives show a weak and insignificant correlation (Beta = 0.011, p = 0.883), social initiatives demonstrate a strong positive impact on profitability (Beta = 0.362, p = 0.000). Governance initiatives also show a positive relationship (Beta = 0.144, p = 0.065), but not statistically significant. Comparisons with previous studies reveal mixed findings; while some studies indicate negative impacts of ESG on profitability, others align with the positive influence of social initiatives found in this research. Overall, the findings suggest that enhancing social initiatives could be key to improving profitability. The implementation of ESG initiatives at Zambian Breweries faces significant challenges, primarily insufficient knowledge or expertise, cited by 38.4% of participants, which hampers effective environmental strategies. Resistance to change (30.1%) stems from an ingrained organizational culture that favors the status quo. Additionally, limited access to sustainable materials affects 20.5% of participants, highlighting logistical issues in sourcing. For social initiatives, inadequate stakeholder engagement is a critical challenge (61.6%), emphasizing the need for active involvement in decision-making. Insufficient knowledge regarding social relationship assessment (27.4%) and difficulty measuring social initiatives (8.2%) further complicate implementation. Governance challenges include regulatory compliance issues (42.5%) and resistance from employees (35.6%), indicating a need for enhanced training and communication. Addressing these challenges is essential for successful ESG implementation. To enhance ESG initiatives and improve profitability, Zambian Breweries should prioritize staff training on environmental practices, supported by 42.5% of participants, as a well-informed workforce is crucial for successful World Journal of Advanced Research and Reviews, 2025, 26(01), 3742-3765 3763 implementation. Recommendations also include improving waste management practices (19.2%) and investing in sustainable technologies (21.9%), which can lead to operational efficiencies and cost savings. For social initiatives, increasing community engagement (35.6%) and promoting diversity and inclusion training (34.2%) are vital for aligning initiatives with societal needs and enhancing brand loyalty. Governance recommendations focus on increasing transparency in decision-making (38.4%) and strengthening ethical guidelines (21.9%), which foster stakeholder trust. Collectively, these strategies create a robust framework that supports operational efficiency, stakeholder engagement, and long-term financial success. 6. Conclusion The study conclusions were as follows: • The study identified a moderate positive relationship between ESG initiatives and profitability, with social initiatives showing the strongest impact. Environmental and governance initiatives contribute positively but may require more time to yield financial benefits. • Key challenges include insufficient knowledge and expertise, resistance to change, lack of stakeholder engagement, limited access to sustainable resources, and regulatory compliance issues. Addressing these barriers is crucial for effective ESG implementation at Zambian Breweries Plc. • Recommendations for enhancing ESG initiatives include continuous staff training, improved community and stakeholder engagement, governance through transparency and ethics, and increased investments in sustainable technology. Implementing these strategies can maximize ESG benefits and mitigate associated challenges. Recommendations Based on the research objectives, some of the recommendations included the following: • Strengthen Waste Management Practices: Develop and implement best practices in waste reduction, recycling, and resource recovery. This will not only reduce environmental relationship but also optimize operational efficiency and yield cost savings. • Implement Regular Environmental Audits: Establish a framework for conducting regular audits to assess the effectiveness of environmental initiatives. This will help identify areas for improvement and ensure that the company remains aligned with best practices in sustainability. • Increase Community Engagement Efforts: Strengthening community involvement through social responsibility initiatives, partnerships, and outreach programs will enhance the company’s reputation, build customer loyalty, and contribute to long-term profitability. Direct engagement with local communities can also provide valuable insights into social needs and opportunities for impactful ESG initiatives. • Conduct deliberate training programs for board of directors: Zambian Breweries Plc should implement targeted training programs for its Board of Directors on ESG governance, ethical leadership, and sustainable business strategies. Equipping board members with ESG knowledge will enhance decision-making, ensure compliance with global sustainability standards, and strengthen corporate governance, ultimately improving long-term profitability and stakeholder trust. Recommendations for future research Future research should expand the scope by assessing multiple firms, incorporating alternative profitability indicators, and conducting much longer longitudinal analyses to assess the relationship between ESG and profitability. Compliance with ethical standards Disclosure of conflict of interest No conflicts of interest to disclose. 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