Integrating ESG Framework with Social Sustainability Metrics: A Dual SEM-PLS Formative–Reflective Model Perspective

Abdulrahman Alhazemi ()
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Abdulrahman Alhazemi: College of Business, Jazan University, Jazan 45142, Saudi Arabia

Sustainability, 2025, vol. 17, issue 6, 1-27

Abstract: Environmental, Social, and Governance (ESG) frameworks have gained prominence in driving corporate sustainability and ethical leadership. Despite their significance, limited researches have explored their direct influence on social sustainability outcomes within organizations. The present research examines the impact of ESG factors and ethical leadership on employee well-being, diversity, community engagement, and training. It highlights their role in fostering sustainability, governance transparency, and workplace inclusivity while aligning with key SDGs. Structural equation modeling–partial least squares (SEM-PLS) with formative–reflective assessment examines ESG variables, ethical leadership, and organizational outcomes. The sample size of 871 respondents ensured statistical validity and reliability. The study analyzes ESG characteristics, ethical leadership, and organizational results using SEM-PLS 4 using a formative–reflective measuring approach. The sample size of 871 respondents ensured statistical validity and reliability. The study indicates that ethical leadership and good governance improve employee well-being, diversity, inclusiveness, and community engagement, supporting SDG 3 (Good Health and Well-Being) and SDG 8 (Decent Work and Economic Growth). These results highlight the critical role of ESG practices in fostering a responsible, inclusive, and sustainable organizational culture, further promoting SDG 16 (Peace, Justice, and Strong Institutions). This research contributes to the growing discourse on ESG-driven leadership and its role in fostering long-term organizational resilience and social responsibility. These insights contribute to advancing sustainable business strategies and reinforcing ESG-driven organizational resilience.

Keywords: ESG framework; ethical leadership; social sustainability; workplace inclusivity; SEM-PLS; sustainable development goals (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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