Decoupling ESG executive incentives, resilience, and cost stickiness in logistics firms

Environmental, Social, and Governance (ESG)-linked executive compensation is a tool for aligning managerial decision-making with sustainability goals, but its behavioural effectiveness is uncertain in emerging markets. This study examined the impact of ESG-based executive compensation on cost stickiness and firm resilience in Indonesia's transportation and logistics industry. Using panel data from 30 listed firms over 2022 to 2024 that met the study’s reporting and data- completeness criteria, the study applies Random Effects regression to test direct effects, mediation through cost stickiness, and moderation by firm size. The results show that ESG-linked compensation significantly improves firm resilience, while cost stickiness significantly weakens resilience. However, ESG-based compensation does not significantly reduce cost stickiness, cost stickiness does not mediate the ESG– resilience relationship, and firm size does not moderate the link between ESG compensation and cost stickiness. These findings reveal decoupling between strategic ESG intent and operational managerial behaviour. ESG incentives strengthen resilience strategically, but they do not penetrate embedded cost-adjustment routines. The study contributes to management accounting by showing that the same governance mechanism can generate strategic adaptation without comparable change in day-to-day resource adjustment, clarifying its bounded operational reach within emerging-market transportation and logistics firms, despite its broader strategic contribution to resilience.