Harmonising ESG Practices for Lasting Sustainability

Abstract

Purpose: Environmental, social, and governance (ESG) factors indeed play a vital role in sustainability efforts across various sectors and industries. ESG factors are often aligned with the United Nations’ Sustainable Development Goals (SDGs), which provide a framework for addressing global challenges related to poverty, inequality, climate change, environmental degradation, and more. Countries that prioritise ESG considerations in their operations and decision-making processes contribute to achieving the SDGs, thus advancing sustainability. The study explores the interplay between ESG practices and overall sustainability outcomes. This involves examining how ESG considerations influence environmental conservation, social equity, and economic resilience and how these factors collectively contribute to sustainability goals.

Methodology: Data envelopment analysis (DEA), which is performed in order to find out the most efficient countries, which will provide valuable insights into the complex relationship between ESG factors and sustainability, informing decision-making and driving positive change towards a more sustainable future.

Findings: ESG practices transform to sustainable development efficiently in half of the EU countries; however, the efficient countries differ depending on the model. Demonstrating the efficient transformation strengthens the country’s case for sustainability. Countries that embrace ESG practices not only contribute to environmental and social well-being but also enhance their competitiveness and long-term value-creation potential.

Implications: Policymakers can use the findings to advocate for policies and regulations that promote ESG integration and sustainable development. This may include measures to incentivise responsible business practices, enhance corporate transparency and disclosure, support sustainable finance initiatives, and strengthen regulatory frameworks to address emerging ESG risks.

Citation

Skvarciany, V. and Jurevičienė, D. (2024), "Harmonising ESG Practices for Lasting Sustainability", Grima, S., Maditinos, D., Noja, G.G., Stankevičienė, J., Tarczynska-Luniewska, M. and Thalassinos, E. (Ed.) Exploring ESG Challenges and Opportunities: Navigating Towards a Better Future (Contemporary Studies in Economic and Financial Analysis, Vol. 116), Emerald Publishing Limited, Leeds, pp. 221-242. https://doi.org/10.1108/S1569-375920240000116012