Can fragmented politics and corporate political awareness push retailers to go greener? Insights from global multinational retail firms

This study tests whether firms’ political awareness reduces or complements investment in environmental social and governance activities, whether national political pluralism encourages such investment, and whether corporate reputation conditions both relationships. The aim of the research is to identify the precise conditions under which political awareness and political pluralism, moderated by corporate reputation, increase or reduce environmental social and governance investment in multinational retail firms so that fulfilment of the aim can be evaluated against the findings. We analyse 4530 firm year observations for 906 listed retail and consumer service companies across 19 countries from 2019 to 2023. Bloomberg ESG composite scores are modelled against established indicators of firm level political awareness, country level political pluralism, and multifactor reputation indices using correlated Mundlak random effects and fixed effects regressions, supported by robustness checks and sub-sample analysis. All models include year and country effects and conservative inference. Robustness uses an alternative pluralism measure and reputation-based subsamples. Three clear patterns emerge. (1) Politically aware firms allocate fewer resources to ESG activities, suggesting that privileged policy access can substitute for visible social responsibility. (2) Greater political pluralism lifts ESG performance, as fragmented authority heightens stakeholder scrutiny. (3) A strong corporate reputation offsets the ESG shortfall of politically aware firms and amplifies the ESG gains from pluralistic contexts, yielding the highest scores when reputation, awareness, and pluralism converge. Estimated effects are statistically reliable and economically moderate. By linking corporate political activity, stakeholder reputation management and ESG outcomes in a cross-national retail setting, this paper advances understanding of how consumer facing firms navigate legitimacy pressures in complex political environments and offers a novel explanation for cross-country variation in retail ESG performance. The study explicitly distinguishes cognitive political awareness from structural political pluralism and clarifies the disciplining role of corporate reputation.