CORPORATE SUSTAINABILITY BETWEEN OBLIGATION AND OPPORTUNITY: REFLECTING ESG PRINCIPLES IN THE CONSTRUCTION SECTOR

Abstract

Integrating sustainability into corporate strategy has shifted from a voluntary initiative to a strategic necessity amid accelerating regulatory and social pressures in the EU. This paper clarifies the conceptual underpinnings of corporate sustainability and ESG, combining stakeholder theory, the resource-based view, legitimacy, and institutional perspectives to explain why firms adopt ESG practices and when these practices translate into a competitive advantage. We then map the evolving European regulatory architecture (CSRD/ESRS, the EU Taxonomy and SFDR) and discuss its implications for disclosure discipline and managerial decision-making. Focusing on the construction sector, which accounts for a significant share of energy-related emissions and resource use, we synthesise empirical findings on environmental, social, and economic performance, highlighting persistent measurement biases toward the E pillar. Building on recent advances, we consolidate a core set of indicators used by European and global contractors and propose an integrative pathway that links ESG inputs, dynamic capabilities (including eco-innovation, data transparency, and multistakeholder engagement), and financial value outcomes. Three research questions guide the review: how mandatory reporting reshapes disclosure in CEE construction firms; which indicator sets dominate; and how unresolved gaps can inform future research and managerial action. The analysis reveals that rigorous, multidimensional metrics and alignment with ESRS-consistent governance and data practices are essential prerequisites for transforming compliance into value creation. We conclude with a research agenda for longitudinal, multi-level designs and hybrid DEA-econometrics approaches capable of quantifying trade-offs across the project life cycle.