<p>This research aims to examine the impact of macroeconomic and sustainability practices on carbon emission performance. Furthermore, it attempts to evaluate the moderating effect of Environmental, Social, and Governance (ESG) on the association between macroeconomic factors and sustainability and carbon emission performance. The final sample consists of 237 firms from the Middle East region. Results reveal that the resource use score, product responsibility score, inflation, and ESG have a positive and significant impact on carbon emission performance. Furthermore, it is revealed that ESG has a negative and significant moderating effect on the association between the environmental innovation score and carbon emission performance. On the other hand, ESG positively and significantly moderates the association between GDP growth, inflation, and the emission score. By addressing these aspects, this study enhances and broadens the existing literature, providing deeper insights into how macroeconomic determinants, environmental factors, and ESG jointly influence carbon emissions in the Middle East region. Furthermore, the study provides practical implications for policymakers, regulators, and corporate leaders by highlighting the importance of macroeconomic and environmental determinants in achieving superior carbon emission reductions in an increasingly competitive and sustainable global business environment.</p>