<![CDATA[This study examines how Environmental, Social, and Governance (ESG) practices enhance creative SME performance through value co-creation and community engagement. Drawing on Stakeholder Theory and Service-Dominant Logic, data were collected from 215 owners, managers, and employees of creative SMEs across Java, Indonesia, and analyzed using PLS-SEM. Results show that all ESG dimensions significantly enhance value co-creation and community engagement. Environmental practices exert the strongest effect on value co-creation (? = 0.426), while social practices have the strongest effect on community engagement (? = 0.454). Both mechanisms significantly mediate ESG–performance relationships, with the social practices–community engagement–SME performance pathway showing the strongest indirect effect (? = 0.180, p 0.001). These findings identify collaborative value creation and community-embedded relationships as complementary pathways linking ESG to performance. The study suggests that creative SMEs should integrate sustainability practices with stakeholder collaboration and meaningful community participation to strengthen competitiveness and sustainable business performance]]>
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