Socio-Economic Factors Affecting ESG Reporting Call for Globally Agreed Standards
Journal
Sustainability
Date Issued
October 2, 2023
DOI
10.3390/su152014927
Abstract
: The ESG ecosystem has evolved over the years, and macro decisions have had an impact
on the implementation and reporting of the ESG Index. This paper aims to first investigate if
all the components of the ESG index are equally reported and secondly to identify the impact
of socio-economic and political variables on the composite ESG index. To achieve this aim, the
authors have utilized macroeconomic variables over the period 1984–2020 for 139 countries from the
Refinitiv database and have constructed composite indices based on principal component analysis
for the ESG components using a panel fixed effects model with structural breaks. The findings have
significant policy implications, emphasizing the importance of globally accepted standards. Finally,
by addressing the ESG at a macro level, it provides the context within which to consider the adoption
of the ESG ecosystem diachronically, thus providing the backdrop for considering the implementation
of the ESG at the micro level.
on the implementation and reporting of the ESG Index. This paper aims to first investigate if
all the components of the ESG index are equally reported and secondly to identify the impact
of socio-economic and political variables on the composite ESG index. To achieve this aim, the
authors have utilized macroeconomic variables over the period 1984–2020 for 139 countries from the
Refinitiv database and have constructed composite indices based on principal component analysis
for the ESG components using a panel fixed effects model with structural breaks. The findings have
significant policy implications, emphasizing the importance of globally accepted standards. Finally,
by addressing the ESG at a macro level, it provides the context within which to consider the adoption
of the ESG ecosystem diachronically, thus providing the backdrop for considering the implementation
of the ESG at the micro level.
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