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Investigating the intersection of ESG investing, green recovery, and SME development in the OECD

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  • Cheng Jin

    (Shaoxing University)

Abstract

This study investigates how ESG (Environmental, Social, and Governance) investing, the development of Small and Medium Enterprises (SMEs), and various control variables affect the utilization of green energy across 10 OECD (The Organization for Economic Co-operation and Development) countries from 2005 to 2020. The findings show a significant positive relationship between ESG investing and the growth of renewable energy, with a 1% increase in ESG investments leading to a 0.19% rise in short-term and a 0.32% rise in long-term renewable energy use. SMEs are also key drivers of renewable energy growth, contributing a 0.10% increase in the short term and a 0.11% increase in the long term for each 1% rise in their revenues. The positive impact of SMEs is attributed to their resource allocation towards sustainable practices and innovation. Control variables reveal that air pollution and labor productivity support renewable energy expansion, while mobile data usage has a negative effect. In the post-COVID-19 context, OECD countries are advised to adopt comprehensive policies that promote ESG investing, support SME growth, focus on clean energy initiatives, and encourage responsible digital practices to boost renewable energy development.

Suggested Citation

  • Cheng Jin, 2025. "Investigating the intersection of ESG investing, green recovery, and SME development in the OECD," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-8, December.
    • Handle: RePEc:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-04873-1
    DOI: 10.1057/s41599-025-04873-1
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