This paper examines whether ESG‑related controversies are isolated incidents or symptoms of deeper, persistent risk management weaknesses within firms. After controlling for company size, sector, and region, the analysis finds that organizations with a history of ESG controversies are significantly more likely to experience future issues. The paper introduces a methodology to measure a firm’s relative likelihood of recurring ESG controversies compared with peers. It also shows that companies demonstrating improvements in ESG culture can reduce future controversy risk, highlighting the importance of sustained governance, accountability, and cultural change in effective ESG risk management.

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