Corporate social governance ESG policies and energy efficiency in G20 countries: The impact of policy coherence on environmental sustainability

Abstract

The increasing urgency for sustainable development in the face of climate change necessitates a deeper understanding of the interactions between corporate governance, environmental policies, and energy efficiency. Despite extensive research on corporate social responsibility (CSR) and sustainability, there remains a critical gap in assessing how these factors collectively influence ecological well-being in G20 nations. This study fills this gap by analyzing the relationships among ecological footprint (EFP), energy efficiency (EE), environmental patents (ENP), policy coherence (PC), economic growth (EG), and corporate governance (ESG and CSR) from 2000 to 2023. Utilizing advanced econometric techniques, including MMQR, FGLS, and Granger causality analysis, the findings provide significant insights. The results reveal that energy efficiency and environmental patents contribute to reducing ecological degradation, confirming their role in sustainable environmental outcomes. However, policy coherence does not exhibit a statistically significant impact on EFP, suggesting gaps in regulatory effectiveness. Moreover, CSR is negatively correlated with ecological degradation, indicating its beneficial role in improving environmental sustainability. Meanwhile, ESG practices demonstrate a significant positive relationship with ecological degradation, suggesting that current ESG strategies may not effectively contribute to environmental sustainability and may require stricter enforcement to prevent greenwashing. Additionally, economic growth (EG) is found to significantly reduce ecological degradation, highlighting that economic expansion in G20 nations might be linked to improved energy efficiency, technological innovation, or more effective environmental policies. These findings underscore the need for stronger environmental regulations, targeted energy policies, and corporate accountability to ensure meaningful sustainability progress. Policymakers must integrate enforceable sustainability measures into governance frameworks and enhance policy coherence to achieve tangible environmental benefits. Strengthening cross-sectoral collaboration and global partnerships will be crucial for aligning G20 nations with Sustainable Development Goals (SDGs), particularly in climate action and responsible consumption. This study contributes to the literature by offering a critical reassessment of how corporate governance, economic growth, and environmental policies influence sustainability, providing actionable insights for policymakers and stakeholders.