| Harshita Budumuru |
A new concept that many countries and companies are striving to achieve is ESG, which stands for Environment, Social, and Governance. It's a framework that evaluates a country's or company's non-financial risks and opportunities, and its impact on society along with the environment. Countries are focusing their efforts on ESG performance as well to become economically robust, socially inclusive, and institutionally strong. ESG performance is a strong indicator of countries' development. However, historically, development has been assessed based on financial indicators such as GDP growth. Therefore, if ESG performance doesn't lead to greater GDP growth, we face the threat that countries will no longer invest into their ESG outlook.
This paper aims to explore the relationship between a country's ESG performance and its GDP. We will use Sustainable Development Goals (SDGs) to measure ESG performance. For example, SDG 13, which addresses countries' actions towards combating climate change, will be used to analyze environmental impact. As for social inclusivity, countries' efforts towards achieving gender equality through SDG 5 will be assessed. Governance will be measured based on SDG 16 which studies the strength of government institutions in promoting justice and sustainable development.]
Using Python tools, we will perform a regression analysis to determine the strength of the relationship between ESG performance and countries' GDP to argue the pivotal role that environmental social governance plays in national development strategies. The results could have significant implications for policymakers and international institutions in driving economic growth by encouraging sustainable development. |