["Business Strategy and the Environment, EarlyView. ", "\nABSTRACT\nThis study examines Malaysia's halal pharmaceutical governance transformation through policy discourse and stakeholder perspectives, focusing on the shift from compliance‐oriented certification towards value‐based governance and institutional enablement through environmental, social and governance (ESG) integration. Using a sequential mixed‐methods design, the study combines directed content analysis of four core policy documents (HIMP 2030, MS 2424:2019, MPPHM 2020 and DRGD) with thematic analysis of semi‐structured interviews involving seven key institutional experts. Findings are interpreted through a three‐stage model of ESG institutionalisation grounded in institutional theory. Results reveal that Malaysia's halal pharmaceutical governance exhibits a hybrid transitional structure: HIMP 2030 articulates strategic ambition for value‐based enablement, whereas MS 2424:2019, MPPHM and DRGD remain predominantly anchored in technical compliance, procedural embedding and regulatory coordination. Governance and social dimensions are prominent, whereas environmental integration remains systematically underdeveloped. Stakeholders broadly recognise ESG's compatibility with Halalan Tayyiban values but identify major barriers, including inter‐agency fragmentation, SME vulnerability to compliance costs and difficulties in translating ethical principles into measurable governance standards. This study provides the first comprehensive empirical analysis of Malaysia's halal pharmaceutical sector through an ESG institutionalisation lens, refines institutional theory beyond linear convergence and positions dual Shariah‐ESG compliance as a strategic benchmark for Malaysia's transition from halal certifier to value‐chain enabler.\n"]