An Evolutionary Game Analysis of Government, Manufacturing Companies, and Consumers in ESG Strategy Selection

As global environmental issues and awareness of social responsibility continue to grow, the importance of ESG (Environmental, Social, and Governance) strategies in manufacturing is increasingly emphasized. These strategies are becoming a key factor in sustainable business development and guide the industry towards a more eco-friendly, equitable, and efficient direction. This research provides critical insights for policymakers, manufacturing companies, and consumers by constructing a triadic dynamic evolutionary game model to explore the mechanisms influencing the government, manufacturing companies, and consumers in choosing ESG strategies. The model assumes that the government, companies, and consumers are bounded rationality actors, adjusting their strategies through the game to achieve optimal outcomes. The analysis considers the initial income, cost inputs, returns, and other related factors for the government, companies, and consumers. The study reveals that multiple factors influence the government, manufacturing companies, and consumers in their choice of ESG strategies. If the government’s governance costs are too high, it may not implement environmental regulation, and manufacturing companies may not adopt ESG strategies. When environmental protection taxes increase, the government is more inclined to strengthen regulation, and companies are more likely to choose ESG strategies. Moreover, consumers’ increased preference for ESG products can raise the opportunity cost of not adopting ESG strategies, further driving the government’s and companies’ decisions to choose ESG strategies. The research highlights the critical role of balancing costs and benefits in choosing ESG strategies, providing theoretical guidance for manufacturing companies and governments in environmental governance and ESG strategy choices. Furthermore, it offers a practical framework for companies to enhance their competitiveness and operational efficiency by aligning with evolving regulatory standards and consumer preferences, ultimately contributing to sustainable development and long-term profitability.