The role of country's green brand and digitalization in enhancing environmental, social, and governance performance

Abstract

In the contemporary global landscape, characterised by increasing concerns about climate change, sustainable development, and corporate responsibility, it is necessary to study and address pressing issues at the intersection of environmental consciousness, technological advancement, and governance practices. This paper aims to examine the relationship between the environmental, social, and governance (ESG) pillars of a country’s development, green brand and digitalisation. To achieve the study’s goal, partial least squares structural equation modelling (PLS-SEM) was applied. The object of investigation was EU countries for 2016-2020. The findings allow us to conclude that a country's green brand is conducive to ESG performance by attracting green investment in renewable energies, social projects, and innovations. The results confirm that governments should prioritise sustainability initiatives, such as investing in renewable energy, adopting sustainable practices, and implementing environmental and social policies. Such efforts can enhance a country's green brand and lead to positive ESG outcomes, attracting more responsible businesses and investors. Moreover, digitalisation promoted governance by 0.142. The results showed that digitalisation could be a powerful tool for improving a country's green brand and ESG performance. Digital technologies can help countries monitor and manage environmental resources, promote sustainable practices, and engage with stakeholders.