Enhancing project-based organization performance through ESG practices: the role of organizational agility

PurposeThis study investigates the influence of environmental, social, and governance (ESG) practices on the performance of project-based organizations (PBOs). It explores how ESG practices contribute to organizational agility and overall performance, using the balanced scorecard (BSCs) framework to assess financial, customer, internal, and learning performance dimensions.Design/methodology/approachThe paper employs partial least squares structural equation modeling (PLS-SEM), to test hypotheses grounded in the resource-based view (RBV) and dynamic capabilities view (DCV). We surveyed 212 valid responses from PBO managers, reflecting a response rate of 48.73%. The model examines the direct impacts of ESG practices on PBO performance and the intervening role of organizational agility.FindingsThe results demonstrate that ESG practices are positively associated with PBO performance across all measured dimensions. Notably, organizational agility mediates the relationship between ESG practices and learning outcomes, emphasizing agility's critical role in facilitating the effective integration of ESG principles. The study finds also that organizational agility positively moderates the relationship between ESG practices and financial, internal and customer-related PBOs outcomes.Originality/valueThis research contributes to the literature by showcasing how ESG practices serve as strategic resources that are positively related to competitive advantages and performance in PBOs. It also underscores the importance of organizational agility in leveraging ESG practices. By integrating ESG practices, PBOs are positively associated with significant performance improvements across multiple dimensions.