Modern companies face pressure to maintain profitability while meeting sustainability demands. Cost Leadership strategies and Environmental, Social, and Governance (ESG) policies are important steps to reduce the risk of Financial Distress. This study aims to analyze the influence of Cost Leadership strategies and ESG policies on Financial Distress risks in companies listed on the Indonesia Stock Exchange (IDX) for 2019-2022. The research method used is a quantitative approach with multiple linear regression analysis on panel data. The sample consisted of 268 companies selected through purposive sampling techniques based on the completeness of financial statements and ESG implementation. The data comes from published annual financial reports and ESG indicators. The results show that the Cost Leadership strategy has a significant negative effect on the risk of Financial Distress, which means that companies with good cost efficiency have lower financial risks. ESG policies also have varying influences, where environmental and social dimensions play a significant role in reducing financial risks. The study concluded that a combination of cost efficiency strategies and ESG implementation can improve a companys financial stability. The implication of these results is the importance of companies integrating sustainability in their business strategies to reduce the risk of Financial Distress in the midst of fierce business competition.