The Role of Environmental, Social, and Governance Aspects in Achieving Sustainable Development Goals
Article Sidebar
Main Article Content
Abstract
Many efforts have examined the determinants that influence the extent to which countries fulfill their sustainability goal commitments. This study explores how Environmental, Social, and Governance (ESG) factors influence the achievement of Sustainable Development Goals (SDGs) across 160 countries. The data were analyzed using multiple linear regression. ESG and Gross Domestic Product (GDP) growth data were obtained from the World Bank, while the SDG Index data were sourced from the Sustainable Development Report publication. The results show that ESG has a significant positive effect on the SDG Index, while GDP growth exhibits only a weak effect. These findings emphasize the need for countries to promote more sustainable and responsible business practices, as ESG can help create a conducive environment for achieving the SDGs. Meanwhile, GDP growth alone will have limited value if it is not sustainable. Economic growth targets and sustainability goals need to be integrated so they reinforce one another. Therefore, countries should focus not only on the growth rate but also on per capita achievements that have a direct impact on citizens’ well-being.
Article Details
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
References
Allen, C., Metternicht, G., & Wiedmann, T. (2018). Initial Progress in Implementing the Sustainable Development Goals (SDGs): A Review of Evidence from Countries. Sustainability Science, 13(5), 1453–1467. https://doi.org/10.1007/s11625-018-0572-3
Amel-Zadeh, A., & Serafeim, G. (2018). Why and How Investors Use ESG Information: Evidence from a Global Survey. Financial Analysts Journal, 74(3), 87–103. https://doi.org/10.2469/faj.v74.n3.2
Bekaert, G., Rothenberg, D., & Noguer, M. (2020). ESG and Firm Performance: Evidence from Global Data. Journal of Sustainable Finance & Investment, 10(3), 215–231. https://doi.org/10.1080/20430795.2020.1722083
Clément, A., Robinot, É., & Trespeuch, L. (2022). Improving ESG Scores with Sustainability Concepts. Sustainability, 14(20), 1-15. https://doi.org/10.3390/su142013154
Clément, A., Robinot, É., & Trespeuch, L. (2023). The Use of ESG Scores in Academic Literature: A Systematic Literature Review. Journal of Enterprising Communities: People and Places in the Global Economy, 19(1), 92-110. https://doi.org/10.1108/jec-10-2022-0147
Consolandi, C., Phadke, H., Hawley, J., & Eccles, R. G. (2020). Material ESG Outcomes and SDG Externalities: Evaluating the Health Care Sector’s Contribution to the SDGs. Organization & Environment, 33(4), 511–533. https://doi.org/10.1177/1086026619899795
Coscieme, L., Mortensen, L. F., Anderson, S., Ward, J., Donohue, I., & Sutton, P. C. (2020). Going Beyond Gross Domestic Product as an Indicator to Bring Coherence to the Sustainable Development Goals. Journal of Cleaner Production, 248, 1-8. https://doi.org/10.1016/j.jclepro.2019.119232
Deegan, C. M. (2019). Legitimacy Theory. Accounting, Auditing & Accountability Journal, 32(8), 2307-2329. https://doi.org/10.1108/aaaj-08-2018-3638
Haessler, P. (2020). Strategic Decisions Between Short-Term Profit and Sustainability. Administrative Sciences, 10(3), 1-31. https://doi.org/10.3390/admsci10030063
Holechek, J. L., Geli, H. M. E., Sawalhah, M. N., & Valdez, R. (2022). A Global Assessment: Can Renewable Energy Replace Fossil Fuels by 2050? Sustainability, 14(8), 1-22. https://doi.org/10.3390/su14084792
Kevser, M., Tunçel, M. B., Gürsoy, S., & Zeren, F. (2023). The Impact of Environmental, Social and Governance (ESG) Scores on Stock Market: Evidence from G7 Countries. Journal of Global Responsibility, 15(4), 305-319. https://doi.org/10.1108/jgr-04-2023-0070
Li, T.-T., Wang, K., Sueyoshi, T., & Wang, D. D. (2021a). ESG: Research Progress and Future Prospects. Sustainability, 13(21), 1-28. https://doi.org/10.3390/su132111663
Li, Y., Zhang, L., & Li, Y. (2021b). Global Sustainable Development and Its Challenges: A Comprehensive Review. Environmental Science and Pollution Research, 28(24), 30352–30368. https://doi.org/10.1007/s11356-021-14163-5
Mehan, A. (2023). Re-Theorizing the Collective Action to Address the Climate Change Challenges: Towards Resilient and Inclusive Agenda. The Canadian Journal of Regional Science, 46(1), 8–15. https://doi.org/10.7202/1097156ar
Meurs, M., Seidelmann, L., & Koutsoumpa, M. (2019). How Healthy is a “Healthy Economy”? Incompatibility between Current Pathways Towards SDG3 and SDG8. Globalization and Health, 15(1), 1–13. https://doi.org/10.1186/s12992-019-0532-4
Nicolo, G., Zampone, G., De Iorio, S., & Sannino, G. (2023). Does SDG Disclosure Reflect Corporate Underlying Sustainability Performance? Evidence from UN Global Compact Participants. Journal of International Financial Management & Accounting, 35(1), 214–260. https://doi.org/10.1111/jifm.12194
Ogunode, O. A. (2022). Legitimacy Theory and Environmental Accounting Reporting and Practice: A Review. South Asian Journal of Social Studies and Economics, 13(1), 17–28. https://doi.org/10.9734/sajsse/2022/v13i130345
O’Hare, B., & Hall, S. G. (2022). The Impact of Government Revenue on the Achievement of the Sustainable Development Goals and the Amplification Potential of Good Governance. Central European Journal of Economic Modelling and Econometrics, 14(2), 104-129. https://doi.org/10.24425/cejeme.2022.142627
Organisation for Economic Co-operation and Development (OECD). (2022). Global Outlook on Financing for Sustainable Development 2023: No Sustainability Without Equity. OECD Publishing. Retrieved 31 July, 2024, from: https://www.oecd.org/content/dam/oecd/en/publications/reports/2022/11/global-outlook-on-financing-for-sustainable-development-2023_688aaeda/fcbe6ce9-en.pdf?
Plastun, A., Makarenko, I., Khomutenko, L., Osetrova, O., & Shcherbakov, P. (2020). SDGs and ESG Disclosure Regulation: Is There an Impact? Evidence from Top-50 World Economies. Problems and Perspectives in Management, 18(2), 231–245. https://doi.org/10.21511/ppm.18(2).2020.20
Plastun, A., Makarenko, I., Kravchenko, O., Ovcharova, N., & Oleksich, Z. (2019). ESG Disclosure Regulation: In Search of a Relationship with the Countries’ Competitiveness. Problems and Perspectives in Management, 17(3), 76–88. https://doi.org/10.21511/ppm.17(3).2019.06
Radu, O.-M., Dragomir, V. D., & Feleagă, L. (2023). The Link Between Corporate ESG Performance and the UN Sustainable Development Goals. Proceedings of the International Conference on Business Excellence, 17(1), 776–790. https://doi.org/10.2478/picbe-2023-0072
Sadiq, M., Ngo, T. Q., Pantamee, A. A., Khudoykulov, K., Thi Ngan, T., & Tan, L. P. (2022). The Role of Environmental, Social, and Governance in Achieving Sustainable Development Goals: Evidence from ASEAN Countries. Economic Research–Ekonomska Istraživanja, 36(1), 1–21. https://doi.org/10.1080/1331677X.2022.2072357
Rai, N. M. G. D. S., & Ismawati, A. F. (2024). The Influence of ESG Disclosure Score on the Cost of Capital in Manufacturing Companies. Journal of Accounting, Entrepreneurship and Financial Technology, 5(2), 81-102. https://doi.org/10.37715/jaef.v5i2.3837
Singhania, M., & Saini, N. (2021). Quantification of ESG Regulations: A Cross-Country Benchmarking Analysis. Vision: The Journal of Business Perspective, 26(2), 160–173. https://doi.org/10.1177/09722629211054173
Soni, T. K. (2023). Demystifying the Relationship Between ESG and SDG Performance: A Study of Emerging Economies. Investment Management and Financial Innovations, 20(3), 1–12. https://doi.org/10.21511/imfi.20(3).2023.01
United Nations. (2023). The Sustainable Development Goals Report 2023: Special Edition. United Nations Publications. Retrieved, 31 July, 2024, from: https://unstats.un.org/sdgs/report/2023/
Urban, P., & Hametner, M. (2022). The Economy–Environment Nexus: Sustainable Development Goals Interlinkages in Austria. Sustainability, 14(19), 1-25. https://doi.org/10.3390/su141912281
Widianingsih, L. P., & Riyono, K. M. (2024). Religiosity Dilemma: A Paradox Related to SDG Implementation. Jurnal E-Bis, 8(1), 203–215. https://doi.org/10.37339/e-bis.v8i1.1673
Yang, F., & Li, X. (2023). Corporate Financialization, ESG Performance and Sustainability Development: Evidence from Chinese-Listed Companies. Sustainability, 15(4), 2978. https://doi.org/10.3390/su15042978
Yang, S., Zhao, W., Liu, Y., Cherubini, F., Fu, B., & Pereira, P. (2020). Prioritizing Sustainable Development Goals and Linking Them to Ecosystem Services: A Global Expert’s Knowledge Evaluation. Geography and Sustainability, 1(4), 321–330. https://doi.org/10.1016/j.geosus.2020.09.004