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Introducing the New ESG‐Based Sustainability Uncertainty Index (ESGUI)

Author

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  • Serdar Ongan
  • Ismet Gocer
  • Cem Işık

Abstract

Rising uncertainties can affect countries' sustainability efforts. Therefore, this study develops and introduces a new ESG‐based sustainability uncertainty index (metric) called ESGUI for the first time. This new index is necessary to better analyze how uncertainties based on ESG (environmental, social, governance) factors, increasingly prominent in the modern business world, are reflected in investment processes. Accurate ESG risks are critical for investors and policymakers. To create this index, we employed text mining techniques on the Economist Intelligence Unit's monthly country reports, analyzing the frequency of ESG‐related keywords and uncertainty indicators. Specifically, the world uncertainty index was integrated into the ESG for 25 countries between 2002M11 and 2024M09. The index's reliability was validated through a vector autoregression model and cross‐referenced with control variables graphically. The findings indicate that the ESGUI exhibits significant correlations with existing measures such as the World Uncertainty Index (WUI) and Economic Policy Uncertainty (EPU) index, thus evidencing the index's robustness. This new index will help policymakers better manage sustainability uncertainties, develop sustainable economic policies, and help investors evaluate ESG‐related risks and opportunities more effectively.

Suggested Citation

  • Serdar Ongan & Ismet Gocer & Cem Işık, 2025. "Introducing the New ESG‐Based Sustainability Uncertainty Index (ESGUI)," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(3), pages 4457-4467, June.
    • Handle: RePEc:wly:sustdv:v:33:y:2025:i:3:p:4457-4467
    DOI: 10.1002/sd.3351
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    Cited by:

    1. Sefa ÖZBEK & Serkan ŞAHİN, 2025. "Moderating role of globalization in agriculture–environment nexus: insights from the inverted load capacity factor," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 13(1), pages 1-27, December.
    2. Ozkan, Oktay & Uche, Emmanuel & Nwani, Chinazaekpere & Okere, Kingsley I., 2025. "Critical minerals volatility under ESG uncertainty: Implications for the clean energy transition," Resources Policy, Elsevier, vol. 108(C).
    3. Ran Wu & Jiale Yan & Cem Işık, 2025. "The dynamics between clean energy, green bonds, grain commodities, and cryptocurrencies: evidence from correlation and portfolio hedging," Economic Change and Restructuring, Springer, vol. 58(4), pages 1-29, August.
    4. Xu, Hui & Wang, Xinpu & Zhang, Dawei, 2025. "Internet access and rural energy poverty alleviation in China: The moderating role of human capital," Energy, Elsevier, vol. 335(C).
    5. Muhammad Shahbaz & Cem Işık & Serdar Ongan & Bekhzod Kuziboev, 2025. "Investigating resource curse/Blessing hypothesis in Central Asia: Do mineral resources matter for economic growth?," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 38(3), pages 625-638, September.
    6. Müller, Lukas & Joubrel, Mathieu, 2025. "A novel approach to sustainable mean-variance portfolio optimization: Accounting for ESG-related uncertainty," Finance Research Letters, Elsevier, vol. 85(PC).
    7. Abrahem Anbea & Kolawole Iyiola & Ahmad Alzubi, 2025. "Bridging Borders and Brains: ESG Sustainability, Integration, Education and Energy Choices in Developed Economies," Energies, MDPI, vol. 18(20), pages 1-21, October.
    8. Ashraf, Muhammad & Ali, Mubashar & Sajjad, Ali, 2025. "Governance as a catalyst for green financial development: An investigation into financial inclusion, green technology innovation, and environmental regulations in Asian NDC countries," Innovation and Green Development, Elsevier, vol. 4(6).
    9. Neslihan Koç & Özgür Emre Koç & Florina Oana Virlanuta & Orhan Orçun Bıtrak & Uğur Çiçek & Radu Octavian Kovacs & Valentina-Alina Vasile (Dobrea) & Tincuta Vrabie, 2025. "Agricultural Value Added, Renewable Energy, and the Environmental Kuznets Curve: Evidence from Turkey," Energies, MDPI, vol. 18(13), pages 1-19, June.
    10. Salwa Saleh Almasabi & Varun Chotia & Priyanka Malik & Valentina Cillo & Del Giudice Manlio, 2026. "Empowering ESG through digital capabilities: a strategic model for entrepreneurial performance and corporate governance transformation," International Entrepreneurship and Management Journal, Springer, vol. 22(2), pages 1-41, June.
    11. Nyakurukwa, Kingstone & Seetharam, Yudhvir & Chipeta, Chimwemwe, 2025. "Global and regional transmission of ESG policy uncertainty: Evidence from developed and emerging markets," Finance Research Letters, Elsevier, vol. 86(PA).
    12. Gaies, Brahim, 2025. "Risky finance, riskier climate: when financial instability meets climate risks on the bridge of sustainability uncertainty," The North American Journal of Economics and Finance, Elsevier, vol. 80(C).
    13. Cem Işık & Serdar Ongan & Hasibul Islam, 2026. "Driving Energy Transition Through Artificial Intelligence: Integrating Economic, Environmental, Social, and Governance (ECON-ESG) Factors in OECD Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 17(1), pages 750-776, February.
    14. repec:bcp:journl:v:9:y:2025:i:11:p:2104-2129 is not listed on IDEAS

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