ESG Performance and Economic Growth in BRICS Countries: A Dynamic ARDL Panel Approach

Earnest Manjengwa, Steven Henry Dunga, Precious Mncayi-Makhanya () and Jabulile Makhalima
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Earnest Manjengwa: Ndlovu Care Group, Groblersdal 0470, South Africa
Steven Henry Dunga: School of Economic Sciences, North-West University, Vanderbijlpark 1900, South Africa
Precious Mncayi-Makhanya: School of Economic Sciences, North-West University, Vanderbijlpark 1900, South Africa
Jabulile Makhalima: School of Economic Sciences, North-West University, Vanderbijlpark 1900, South Africa

Sustainability, 2025, vol. 17, issue 14, 1-25

Abstract: This study investigates the relationship between ESG performance and economic growth in BRICS nations from 2000 to 2020, aiming to understand how ESG practices influence development trajectories. By integrating economic theories with relevant conceptual frameworks, this study provides a comprehensive analysis of ESG dynamics in emerging economies. The purpose of this study is to determine how the economic growth of the BRICS countries between 2000 and 2020 was impacted by ESG performance at the national level. This work contributes to the body of knowledge by offering a fresh macroeconomic examination of the connection between economic growth and ESG performance in the BRICS nations, a topic that is still relatively unexplored in comparison to firm-level research. A significant knowledge gap on how developing economies strike a balance between rapid economic expansion and environmental and social sustainability is filled by the research’s use of a thorough national-level ESG framework. The study employed a dynamic panel auto regressive distributed lag (ARDL) model, utilising a dynamic pooled mean group (PMG) ARDL econometric technique for both short- and long-term estimates. The findings reveal a short-term negative relationship between ESG performance and economic growth in the BRICS countries, which implies that there are high transitional effects involved in sustainable growth solutions. It also highlights the structural and developmental heterogeneity among BRICS countries. Moreover, the study highlights that carbon emissions positively influence short-term economic growth, underscoring the challenge of balancing sustainability with the continued reliance on fossil fuels in these economies. However, the long-term results show that strong ESG practices ultimately positively affect economic growth, reinforcing the importance of investing in sustainable development for achieving high-quality, long-term prosperity. This conclusion emphasises that, while short-term trade-offs may exist, robust ESG frameworks are crucial for fostering enduring economic and environmental well-being.

Keywords: sustainable development; developing countries; GDP per capita; ESG; ARDL (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:17:y:2025:i:14:p:6334-:d:1698886

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