The Impact of Economic Growth on Sustainable Development: an Analysis of ESG Indicators
https://doi.org/10.47703/ejebs.v68i4.433
Abstract
This study aims to evaluate economic growth's impact on key sustainability components, including carbon productivity, ecological conditions, healthcare, social well-being, and education. This paper employs Principal Component Analysis (PCA) to group complex ESG indicators into five distinct categories, followed by quadratic regression modeling to capture nonlinear relationships between GDP growth and each ESG component. The study uses statistical data collected from national and international sources for the period 2012-2022. The analysis showed that the impact of economic growth on ESG indicators in Kazakhstan is expressed heterogeneously. Economic growth showed the greatest correlation with education indicators (R2 = 0.696, p<0.01), indicating a significant improvement in the educational sector as GDP per capita increases. At the same time, the impact on environmental indicators turned out to be weaker (R2 = 0.352, p = 0.176), which indicates minor improvements in the environment that require additional environmental initiatives. Economic growth had the least impact on carbon productivity, with R2 = 0.13 (p = 0.58), which underlines the need for targeted measures to improve carbon efficiency. The results highlight that although economic growth contributes to social and educational development, specific ESG-oriented strategies are required to achieve sustainable development in Kazakhstan, especially in the field of carbon efficiency. Therefore, Future research may be aimed at localizing ESG metrics, evaluating the effectiveness of programs in the socio-environmental field, and creating multifactorial models for ESG analysis.
Keywords
Sustainable Development,
Economics,
Green Economy,
Carbon Productivity,
Environmental Efficiency,
Social Indicators,
Economic Growth,
Kazakhstan
Supporting agencies: This research has been funded by the Science Committee of the Ministry of Science and Higher Education of the Republic of Kazakhstan (Gran “Strategy of structural and technological modernization of the basic sectors of the economy of the Republic of Kazakhstan based on ESG: criteria, mechanisms and forecast scenarios” BR24993089)
About the Author
Gaukhar Kenzhegulova
University of International Business named after K. Sagadiyev, Almaty, Kazakhstan
Russian Federation
Russian Federation
PhD candidate, Email: gaukhar.kenzhegulova@gmail.com
References
1. Chiu, I. H.-Y. (2024). Regulating ESG Rating and Data Product Providers: Critically Examining EU Regulation through the Lens of Functional Regulatory Consistency. European Journal of Risk Regulation, 1–21. https://doi.org/10.1017/err.2024.53
2. Daniek, K. (2020). Green economy indicators as a method of monitoring development in the economic, social and environmental dimensions. Nierówności społeczne a wzrost gospodarczy, 62, 150-173. https://doi.org/10.15584/nsawg.2020.2.10
3. Daugaard, D., & Ding, A. (2022). Global Drivers for ESG Performance: The Body of Knowledge. Sustainability, 14(4), 2322. https://doi.org/10.3390/su14042322
4. Deng, X., Huang, Z., & Cheng, X. (2019). FinTech and sustainable development: Evidence from China based on P2P data. Sustainability, 11(22), 6434. https://doi.org/10.3390/su11226434
5. El Gibari, S., Gómez, T., & Ruiz, F. (2019). Building composite indicators using multicriteria methods: a review. Journal of Business Economics, 89, 1-24. https://doi.org/10.1007/S11573-018-0902-Z
6. Hussain, S., Akbar, M., Gul, R., Shahzad, S. J. H., & Naifar, N. (2023). Relationship between financial inclusion and carbon emissions: International evidence. Heliyon, 9(6). https://doi.org/10.1016/j.heliyon.2023.e16472
7. Huisingh, D., Zhang, Z., Moore, J.C., Qiao, Q., & Li, Q. (2015). Recent advances in carbon emissions reduction: policies, technologies, monitoring, assessment and modeling. Journal of Cleaner Production, 103, 1-12. https://doi.org/10.1016/J.JCLEPRO.2015.04.098
8. Ingarao, G. (2017). Manufacturing strategies for efficiency in energy and resources use: The role of metal shaping processes. Journal of Cleaner Production, 142, 2872-2886. http://dx.doi.org/10.1016/j.jclepro.2016.10.182
9. Jiang, P.-C., Feng, G.-F., & Yang, H.-C. (2022). New measurement of sovereign ESG index. Innovation and Green Development, 1(2), 100009. https://doi.org/10.1016/j.igd.2022.100009
10. Khoruzhy, L.I., Semenov, A.V., Averin, A.V., & Mustafin, T.A. (2022). ESG investing in the AI era: Features of developed and developing countries. Frontiers in Environmental Science, 10, 1-18. https://doi.org/10.3389/fenvs.2022.951646
11. Lehmann, S. (2018). Implementing the Urban Nexus approach for improved resource-efficiency of developing cities in Southeast-Asia. City, Culture and Society, 13, 46-56. https://doi.org/10.1016/j.ccs.2017.10.003
12. Leleux, B.F., & Kaaij, J.V. (2018). ESG Ratings and the Stock Markets. Winning Sustainability Strategies. https://doi.org/10.1007/978-3-319-97445-3_6
13. Li, J., & Colombier, M. (2009). Managing carbon emissions in China through building energy efficiency. Journal of environmental management, 90(8), 2436-2447. https://doi.org/10.1016/j.jenvman.2008.12.015
14. Mohsin, M., Rasheed, A.K., Sun, H., Zhang, J., Iram, R., Iqbal, N., & Abbas, Q. (2019). Developing low carbon economies: An aggregated composite index based on carbon emissions. Sustainable Energy Technologies and Assessments, 35, 365-374. https://doi.org/10.1016/j.seta.2019.08.003
15. Morrow, D., & Vezér, M. (2020). 10 for 2020: Creating Impact through Thematic Investing.
16. Ness, D., & Xing, K. (2017). Toward a Resource‐Efficient Built Environment: A Literature Review and Conceptual Model. Journal of Industrial Ecology, 21. https://doi.org/10.1111/jiec.12586
17. Pagano, M. S., Sinclair, G., & Yang, T. (2018). Understanding ESG Ratings and ESG Indexes. Research Handbook of Finance and Sustainability, 339–371. https://doi.org/10.4337/9781786432636.00027
18. Prieto‐Sandoval, V., Jaca, C., Santos, J., Baumgartner, R. J., & Ormazabal, M. (2019). Key strategies, resources, and capabilities for implementing circular economy in industrial small and medium enterprises. Corporate Social Responsibility and Environmental Management, 26(6), 1473-1484. https://doi.org/10.1002/csr.1761
19. Rossi, C., Byrne, J. G., & Christiaen, C. (2023). Breaking the ESG Rating Divergence: An Open Geospatial Framework for Environmental Scores. Journal of Environmental Management.
20. Rzeźnik, A., Hanley, K. W., & Pelizzon, L. (2024). Investor Reliance on ESG Ratings and Stock Price Performance. SAFE Working Paper No. 310.
21. Rusu, R. (2023). The Interconnections Between Economic, Social and Environment Related Indidcators and their Relationship with Economic Growth. Revista Economic, 75(2), 105 – 119. https://doi.org/10.56043/reveco-2023-0021
22. Sinha, R. K., & Chaturvedi, N. D. (2019). A review on carbon emission reduction in industries and planning emission limits. Renewable and Sustainable Energy Reviews, 114, 109304. https://doi.org/10.1016/j.rser.2019.109304
23. Tan, Y., Karbassi Yazdi, A., Antunes, J., Wanke, P., Gunasekaran, A., Corrêa, H.L., & Coluccio, G. (2024). The Quest for an ESG Country Rank: A Performance Contribution Analysis/MCDM Approach. Mathematics, 12, 1865. https://doi.org/10.3390/math12121865
24. Vargas‐Santander, K.G., Álvarez‐Díez, S., Baixauli‐Soler, S., & Belda‐Ruiz, M. (2023). Developing a country's sustainability indicator: An analysis of the effect on trade openness. Environmental and Sustainability Indicators, 19, 100280. https://doi.org/10.1016/j.indic.2023.100280
25. Wang, J., Yu, J., & Zhong, R. (2023). Country environmental, social and governance performance and economic growth: The international evidence. Accounting & Finance, 63(4), 3911-3941. https://doi.org/10.1111/acfi.13079
Review
For citations:
Kenzhegulova G. The Impact of Economic Growth on Sustainable Development: an Analysis of ESG Indicators. Eurasian Journal of Economic and Business Studies. 2024;68(4):18–31. https://doi.org/10.47703/ejebs.v68i4.433
Views:
44
JATS XML
Email this article 