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ESG and economic growth: Catalysts for achieving sustainable development goals in developing economies

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  • Mithilesh Gidage
  • Shilpa Bhide

Abstract

This study investigates the impact of Environmental, Social, and Corporate Governance (ESG) dimensions and economic growth on the achievement of Sustainable Development Goals (SDGs) in developing countries. The research utilizes a quantitative approach, analyzing panel data from 12 developing nations from 2010 to 2022. The Panel ARDL (Pooled Mean Group) method is applied to assess both short‐term and long‐term effects of disaggregated ESG components—environmental, social, and governance scores—on SDG attainment. Robustness is confirmed through endogeneity tests conducted using Instrumental Variable (IV) regression analysis with the Two‐Stage Least Squares (2SLS) method. The results reveal a positive relationship between ESG dimensions and SDG attainment, with economic growth also contributing significantly to SDG progress. The study highlights the importance of integrating ESG principles with economic growth strategies to enhance SDG fulfillment in developing countries, offering valuable insights for policymakers and business leaders in advancing sustainable development agendas.

Suggested Citation

  • Mithilesh Gidage & Shilpa Bhide, 2025. "ESG and economic growth: Catalysts for achieving sustainable development goals in developing economies," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(2), pages 2060-2077, April.
    • Handle: RePEc:wly:sustdv:v:33:y:2025:i:2:p:2060-2077
    DOI: 10.1002/sd.3199
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