ECON-ESG factors on energy efficiency: Fostering sustainable development in ECON-growth-paradox countries

Abstract

This study examines how economic (ECON), environmental (E), social (S), and governance (G) factors affect SDG-based energy efficiency (EE) for G-7 countries. In this examination, the study, for the first time, introduces the form “ECON-ESG” defined by Isik et al. (2024c). The authors integrated economic factors (ECON) into traditional ESG since they assert that economic impacts on sustainability are undeniable. The CS-ARDL model is used with the AMG and CCEMG techniques to test its robustness. Empirical findings reveal that while economic factors (ECON) negatively impact EE, environmental factors (E) positively impact it. Based on this negative impact on EE, and of course, only within the limits of this study, we, for the first time, conceptually define and introduce G-7 as “ECON-growth-paradox and E-growth-harmonized countries.” Because G-7 countries are developed economically, however, development negatively (paradoxically) affects these countries’ EEs, contrary to positive effect expectations. The word “harmonized” refers to the supportive-harmonizing (positive) effect of environmental factors (E) on EE. Therefore, policymakers need to align conflicting economic and environmental policies on energy efficiency. The country-wise analysis results show that while Canada, Italy, and the USA are ECON-growth-paradox countries, the UK is an E-growth-harmonized country.