Beyond <scp>ESG</scp> Disclosure: Circular Economy Practices and Corporate Financial Performance Across Global Sectors

ABSTRACT The growing prominence of environmental, social and governance (ESG) metrics has reshaped how corporate sustainability is assessed, yet these indicators often prioritise disclosure over operational transformation. This study examines whether circular economy practices, conceptualised as an operational dimension of corporate social responsibility, are associated with corporate financial performance beyond conventional ESG scores. Using a balanced panel of leading global firms across four sectors over the period 2015–2024, the analysis explores the relationship between the degree of circular economy adoption, market valuation and profitability indicators. The results indicate that firms with higher levels of circular economy adoption tend to have higher market capitalisation and superior financial returns (measured by ROA and ROE), while ESG scores display a weaker and, in some cases, negative association with valuation. These findings suggest that circular economy practices capture dimensions of sustainability performance not fully reflected in ESG ratings. By empirically distinguishing between sustainability disclosure and operational circularity, this study contributes to the corporate social responsibility and sustainability strategy literature and offers practical insights for managers, investors, and policymakers seeking to align sustainability initiatives with long‐term value creation.