Business Strategy and the Environment· 2025Q1
Economic, Environmental, Social, and Governance (ECON ‐ ESG) Strategies For Sustainable Development: Theory and a Holistic Evidence From Germany
- 70citations
- Q1SCImago
- 2025year
Short summary
Integrating economic factors (ECON) with environmental, social, and governance (ESG) indicators reveals that many ECON-ESG indicators in Germany are nonstationary, exhibit structural breaks, and display nonlinear dynamics, necessitating long-term, flexible policy designs for achieving SDGs.
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Key points
- Introduced an ECON-ESG framework by integrating economic factors into the traditional ESG structure.
- Analyzed time series characteristics (stationarity, structural breaks, nonlinear dynamics) of ECON-ESG indicators in Germany.
- Found that many ECON-ESG indicators are nonstationary and exhibit structural changes over time.
- Demonstrated nonlinear dynamics in various economic and ESG indicators.
- Results suggest sustainability policies need to focus on indicator behavior and vulnerabilities, not just levels.
AI-generated from the title and abstract; the full text is not read.
Abstract
ABSTRACT To achieve the SDGs, in addition to environmental (E), social (S), and governance (G) indicators, economic components should also be evaluated holistically. In this context, this research aims to test the time series characteristics of the indicators in the ECON‐ESG structure, which is created by integrating the economic dimension into the ESG framework for Germany. For this purpose, linear and nonlinear structures, Fourier‐based stationarity tests, and Bai–Perron multiple structural break tests were employed to examine the linear and nonlinear structures, stationarity cases, and structural breaks of various ESG and economic indicators (ECON). Findings show that many indicators are nonstationary, undergo structural changes over time, and exhibit nonlinear dynamics. The results indicate that sustainability policies should focus not only on indicator levels but also on the behavioral patterns and vulnerabilities of these indicators over time. In this regard, policymakers need to develop a holistic perspective on the economy and ESG, focusing on long‐term and flexible policy designs. The study also offers important implications for how the ECON‐ESG framework can serve as a model for both national and international markets, particularly in Germany, a developed and leading country in terms of sustainability. Therefore, the proposed ECON‐ESG framework offers both theoretical and practical roadmaps for policymakers, firms, and investors to create long‐term ESG strategies in support of the SDGs.
The authors' abstract, as published at the source. Business Strategy and the Environment, 2025 · DOI ↗
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Field: Economics and Econometrics
Economics and EconometricsEconomics, Econometrics and Finance