Determinants of ESG sustainability in financial systems: a fuzzy cognitive approach with a focus on Georgia

Nazira Kakulia () and Salome Tvalodze ()
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Nazira Kakulia: Ivane Javakhishvili Tbilisi State University, Georgia
Salome Tvalodze: National Bank of Georgia, Georgia

Entrepreneurship and Sustainability Issues, 2025, vol. 12, issue 3, 10-21

Abstract: Sustainable finance has gained momentum over the last several years amid increasing environmental and social challenges. This research seeks to characterise Environmental, Social, and Governance (ESG) sustainability within the financial sector as a novel concept, identifying its core determinants, evaluating and modelling relationships among them, and subsequently analysing various scenarios for enhancing ESG Sustainability. To this end, a fuzzy cognitive map construction and modelling method was employed. Through a multi-stage process, a fuzzy cognitive map of ESG Sustainability was developed using Georgia's financial sector as a case study. The main findings identified ten fundamental factors influencing ESG Sustainability within the financial sector and evaluated the causal relationships among them. According to experts' assessments, the Local Sustainable Finance Regulatory Framework and the Involvement of International Financial Institutions are particularly important among these key fundamental factors. Additionally, the scenario analysis revealed that targeted improvements in the key factors could significantly enhance ESG Sustainability.

Keywords: sustainability; responsible business practice; sustainable finance; Environmental; Social; and Governance (ESG); sustainability; Fuzzy Cognitive Map (FCM) (search for similar items in EconPapers)
JEL-codes: C63 C80 E58 G20 G28 G32 G38 O16 Q01 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ssi:jouesi:v:12:y:2025:i:3:p:10-21

DOI: 10.9770/s6258796776

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