Intl. Conference on Economics, Finance & Business, Paris

DOES ESG AFFECT ECONOMIC DEVELOPMENT; TAKING EVIDENCE FROM CROSS-COUNTRY ANALYSIS CONSIDERING ROLE OF COUNTRIES' ECONOMIC STATUS AND LEGAL ORIGIN

ANUSHREE MISHRA

Abstract:

This paper examines the impact of Environmental, Social, and Governance (ESG) factors on Economic Development using cross-country data for the period of 2000 to 2021. We find that ESG factors measured by CO2 Emission, Fertility Rate, and Political Stability are significantly related to economic development. We also find that countries’ development status and legal origin impact the relationship between ESG and GDP. In Civil Law countries, Environmental and Social factors play an important role in economic development, whereas in Common law nations, Environmental and Governance factors are significant for their economic development. We also find that in developed countries, only environmental factors impact economic development significantly, whereas in developing countries, both environmental and social factors impact economic development significantly.

Keywords: “Environmental, Social, and Governance (ESG),” “Gross Domestic Product (GDP),” Economic Development, Co2 Emission, Control of Corruption.