Abstract
This paper utilizes agency and stakeholder theories to explore the relationship between ESG (environmental, social, and governance) performance and supply chain contracts. Drawing from data using a sample of ASX 300 firms over the period of 2012 to 2021, our analysis reveals a negative relationship between ESG performance and supply chain contracts, aligning with agency theory principles. Furthermore, this negative association is observed to be more pronounced among firms characterized by lower levels of information asymmetry. These findings hold significant practical implications for management, business suppliers, and customers alike. Specifically, managers can leverage these insights to reinforce the commitment of supply chain partners towards ESG initiatives, thereby enhancing sustainability practices within the supply chain ecosystem.