Behavioral Drivers of ESG Compliance: An Evolutionary Game-Theoretic Analysis of Trust, Fairness, and Corporate Cooperation

Environmental, social, and governance (ESG) frameworks increasingly shape corporate strategy and sustainable development, yet the behavioral mechanisms underlying ESG compliance remain insufficiently understood. Traditional economic models typically assume fully rational decision-making and overlook how psychological factors influence corporate sustainability choices. This study integrates behavioral game theory with organizational psychology to examine how trust, fairness, and loss aversion affect corporate ESG compliance in a multi-stakeholder environment. An evolutionary multi-agent game model involving regulators, firms, investors, and consumers under bounded rationality is developed. Behavioral parameters—trust, fairness preferences, and loss aversion—are incorporated into payoff structures to analyze their effects on cooperative equilibrium outcomes. Simulation results indicate that higher levels of institutional trust and fairness significantly increase ESG compliance and reduce greenwashing behavior, accelerating convergence toward cooperative equilibria. In contrast, excessive loss aversion generates unstable compliance driven primarily by fear of penalties rather than intrinsic commitment to sustainability. Sensitivity analysis further identifies behavioral thresholds where modest increases in trust produce substantial improvements in ESG adoption. The findings highlight ESG governance as a behavioral coordination challenge rather than purely an economic optimization problem. This research provides insights for policymakers and corporate leaders seeking to promote sustainable business practices and contributes to advancing the United Nations Sustainable Development Goals, particularly responsible consumption and production, climate action, and sustainable economic growth.