The Conceptual Link between Country Competitiveness and Corporate ESG Performance

Abstract

Abstract The alignment between environmental, social and governance (ESG) performance and country’s competitiveness helps academics and practitioners in observing corporate contributions to sustainable growth, leveraging corporate environments focused on ESG aspects that have a macroeconomic impact, but a limited number of studies analyzes this link. Thus, the aim of this study is to propose a case study for which an original mapping is proposed. Data were collected from Refinitiv Eikon, for two companies (in the oil and gas and financial services sectors), located in Romania, for the financial year 2021, and from the Global Competitiveness Report published by the World Economic Forum in 2019, as it is the latest full report available. Interpretative analysis was applied to the proposed mapping of sustainability practices reflected through ESG indicators, in relation to various relevant components of six pillars from the global competitiveness index. Our qualitative research included the computation of a total score based on the impact of ESG performance in pursuing the country’s competitiveness. Our results show that in Romania, the largest oil and gas company disclosed quantitative and qualitative information on ESG indicators and obtained a score (25) which is equal to the one obtained by the analyzed bank, the largest in Romania. The highest contribution to reaching the country’s competitiveness is related to the social pillar, especially the workforce dimension, for both organizations. Thus, corporate ESG performance is mapped to six pillars out of 12 regarding country competitiveness, for entities activating in either financial or non-financial industries, with different weight allocated to each of the three ESG pillars. This research is important for various stakeholders, such as governments, business, and civil society, depending on the role within the organization, either direct or indirect.