SUPPLY CHAIN FINANCE SUSTAINABILITY AND ITS IMPACT ON FINANCIAL PERFORMANCE: THE MEDIATING ROLE OF ESG PRACTICES

HILAL AHMAD MALIK , SOBIA WAJAHAT , DR. ALTAMASH KHAN , SADAF ADALAT , Dr. Haris Bin Khalid

Main Objective was study examines the direct and indirect relationships between supply chain finance (SCF) and financial performance (FP) through the mediating role of ESG practices. The analysis is based on a sample of 103 Pakistani companies covering the period 2017–2025. The present study employs structural equation modelling to specify both direct and indirect effects between SCF, ESG practices, and FP. The results reveal that SCF has a positive and significant effect on FP. Furthermore, ESG practices partially mediate the relationship between SCF and FP. The findings confirm that Pakistani firms, under increasing stakeholder pressure regarding environmental performance, may leverage SCF and ESG practices to enhance FP. The results provide detailed actionable insights for researchers, practitioners, and regulators with an interest in corporate governance and SCF. For regulators, the study highlights the importance of examining how ESG practices influence financial outcomes within various institutional settings, thereby equipping them with the necessary knowledge to make informed decisions.The findings validate that firms with stronger ESG performance are more likely to enhance transparency and meet stakeholder expectations. This not only strengthens their legitimacy and long-term sustainability but also contributes to the broader societal goal of responsible corporate citizenship, fostering a sense of connection among stakeholders.This study super significantly enriches the literature by examining the mediating role of ESG practices in the SCF–FP relationship, this unique perspective enhances tour understanding of how sustainability-oriented finance can improve both social and economic outcomes, providing the crystal-clear audience with valuable and original insights.