["Corporate Social Responsibility and Environmental Management, Volume 33, Issue 2, Page 2232-2253, March 2026. ", "\nABSTRACT\nThis study examines the conditional relationship between Environmental, Social, and Governance (ESG) performance and corporate competitiveness among 15,450 firm‐year observations of listed industrial firms in Europe and the UK from 2008 to 2022. We employ a robust multi‐method approach encompassing system GMM, CS‐ARDL, difference‐in‐differences, propensity score matching and quantile regression. We provide causal evidence that ESG performance improves firm competitiveness. However, this relationship is significantly moderated by financial constraints, capital costs, information asymmetry and agency conflicts. This study is the first to integrate these four moderators within a unified theoretical and empirical framework, offering a more nuanced perspective on ESG's strategic impact. Our results complement agency and signal theories by identifying key boundary conditions that shape ESG effectiveness. The results offer novel insights into how firm‐specific financial and governance contexts influence the competitiveness of ESG engagements. We draw implications for corporate strategists, investors and policymakers who aim to align ESG priorities with their competitive advantages.\n"]