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Search Results (464)

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Keywords = social pillar of sustainability

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24 pages, 1222 KiB  
Article
Advancing Port Sustainability in the Baltic Sea Region: A Comparative Analysis Using the SMCC Framework
by Mari-Liis Tombak, Deniece Melissa Aiken, Eliise Toomeoja and Ulla Pirita Tapaninen
Sustainability 2025, 17(15), 6764; https://doi.org/10.3390/su17156764 - 25 Jul 2025
Viewed by 358
Abstract
Ports in the Baltic Sea region play an integral role in advancing sustainable maritime practices in the area, due to their geographic interconnectedness, economic importance, and sensitivity to environmental challenges. While numerous port sustainability assessment methods exist, most of which are grounded in [...] Read more.
Ports in the Baltic Sea region play an integral role in advancing sustainable maritime practices in the area, due to their geographic interconnectedness, economic importance, and sensitivity to environmental challenges. While numerous port sustainability assessment methods exist, most of which are grounded in the Triple Bottom Line (TBL) metric, many tend to emphasise whether specific targets have been met, rather than evaluating port sustainability on a scalar basis. This study explores the sustainability strategies of seven selected ports in five Baltic Sea countries using an innovative qualitative evaluation framework developed by the Swedish Maritime Competence Centre (SMCC). The SMCC model integrates the three core pillars of sustainability-environmental, social, and economic dimensions, while incorporating energy efficiency and digitalisation as critical enablers of modern port operations. The findings reveal significant variation in sustainability performance among the selected ports, shaped by regional contexts, operational profiles, and prior engagement with sustainability initiatives. Also, the results bring into light the most common sustainable practices used in the ports, e.g., LED lightning, onshore power supply, and port information systems. Full article
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33 pages, 304 KiB  
Article
LEADER Territorial Cooperation in Rural Development: Added Value, Learning Dynamics, and Policy Impacts
by Giuseppe Gargano and Annalisa Del Prete
Land 2025, 14(7), 1494; https://doi.org/10.3390/land14071494 - 18 Jul 2025
Viewed by 519
Abstract
This study examines the added value of territorial cooperation within the LEADER approach, a key pillar of the EU’s rural development policy. Both interterritorial and transnational cooperation projects empower Local Action Groups (LAGs) to tackle common challenges through innovative and community-driven strategies. Drawing [...] Read more.
This study examines the added value of territorial cooperation within the LEADER approach, a key pillar of the EU’s rural development policy. Both interterritorial and transnational cooperation projects empower Local Action Groups (LAGs) to tackle common challenges through innovative and community-driven strategies. Drawing on over 3000 projects since 1994, LEADER cooperation has proven its ability to deliver tangible results—such as joint publications, pilot projects, and shared digital platforms—alongside intangible benefits like knowledge exchange, improved governance, and stronger social capital. By facilitating experiential learning and inter-organizational collaboration, cooperation enables stakeholders to work across territorial boundaries and build networks that respond to both national and transnational development issues. The interaction among diverse actors often fosters innovative responses to local and regional problems. Using a mixed-methods approach, including case studies of Italian LAGs, this research analyses the dynamics, challenges, and impacts of cooperation, with a focus on learning processes, capacity building, and long-term sustainability. Therefore, this study focuses not only on project outcomes but also on the processes and learning dynamics that generate added value through cooperation. The findings highlight how territorial cooperation promotes inclusivity, fosters cross-border dialogue, and supports the development of context-specific solutions, ultimately enhancing rural resilience and innovation. In conclusion, LEADER cooperation contributes to a more effective, participatory, and sustainable model of rural development, offering valuable insights for the broader EU cohesion policy. Full article
35 pages, 932 KiB  
Systematic Review
Exploring Sustainability in Startups: A Systematic PRISMA Review
by Munyaradzi Duve and Benjamin Marx
Sustainability 2025, 17(14), 6475; https://doi.org/10.3390/su17146475 - 15 Jul 2025
Viewed by 469
Abstract
Startups are essential to solving contemporary global financial and social challenges. The purpose of this paper is to provide a systematic review of the literature on the economic, environmental, and social values of sustainability in startups. Research papers that included the terms “sustainability [...] Read more.
Startups are essential to solving contemporary global financial and social challenges. The purpose of this paper is to provide a systematic review of the literature on the economic, environmental, and social values of sustainability in startups. Research papers that included the terms “sustainability in startups”, “sustainability of entrepreneurship”, “environmentally friendly new businesses”, “startups”, “entrepreneur”, “sustainable development”, “green economy”, “green investment”, “green development”, “financial sustainability”, “entrepreneurship performance”, and “agriculture entrepreneurship” were considered for analysis. The PRISMA 2020 protocol was used for the screening of relevant articles addressing economic, environmental, and social sustainability in startups. This study is limited to 42 research papers extracted from SCOPUS and DOAJ databases covering the period 2010 to 2024. Most of these provide literature on European, American, and Asian countries, indicating that startups prioritise the economic value of sustainability. However, the review of the literature demonstrates that startups are beginning to adopt a more balanced approach to sustainability as all three pillars addressing economic, environmental, and social values are represented. Sustainable practices improve startups’ performance. There is a need for active research in startup sustainability in the African context to address the research gap identified in the analysis of the literature. Full article
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26 pages, 1404 KiB  
Article
Government Revenue Structure and Fiscal Performance in the G7: Evidence from a Panel Data Analysis
by Costinela Fortea
World 2025, 6(3), 97; https://doi.org/10.3390/world6030097 - 9 Jul 2025
Viewed by 536
Abstract
In a global context characterized by budgetary pressures, aging populations, and accelerated economic transitions, the capacity of countries to mobilize stable and sustainable tax revenues represents a crucial pillar for maintaining macroeconomic stability and social cohesion. This research investigated the determinants of total [...] Read more.
In a global context characterized by budgetary pressures, aging populations, and accelerated economic transitions, the capacity of countries to mobilize stable and sustainable tax revenues represents a crucial pillar for maintaining macroeconomic stability and social cohesion. This research investigated the determinants of total tax revenues in the developed economies of the G7 group (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) during the period 2000–2022, employing both static and dynamic panel econometric approaches. The estimated model considered total tax revenues as the dependent variable, while the explanatory variables encompassed the main categories of government revenues: direct taxes (personal and corporate income), indirect taxes (consumption, trade, and other taxes), social contributions, grants, other non-tax revenues, and institutional quality indicators (regulatory quality and control of corruption). The empirical findings revealed that all tax components analyzed exert a positive and significant influence on total tax revenues, with particularly strong effects observed for consumption taxes, social contributions, and personal income taxes. Based on these results, the study provides policy recommendations aimed at diversifying revenue sources, balancing direct and indirect taxation, and broadening the tax base equitably. The study advances the literature on international taxation by offering an integrated and comparative analysis of the revenue structures in advanced economies, while also identifying relevant pathways for sustainable tax reforms in a dynamic global environment. Full article
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50 pages, 1773 KiB  
Review
Understanding Smart Governance of Sustainable Cities: A Review and Multidimensional Framework
by Abdulaziz I. Almulhim and Tan Yigitcanlar
Smart Cities 2025, 8(4), 113; https://doi.org/10.3390/smartcities8040113 - 8 Jul 2025
Viewed by 888
Abstract
Smart governance—the integration of digital technologies into urban governance—is increasingly recognized as a transformative approach to addressing complex urban challenges such as rapid urbanization, climate change, social inequality, and resource constraints. As a foundational pillar of the smart city paradigm, it enhances decision-making, [...] Read more.
Smart governance—the integration of digital technologies into urban governance—is increasingly recognized as a transformative approach to addressing complex urban challenges such as rapid urbanization, climate change, social inequality, and resource constraints. As a foundational pillar of the smart city paradigm, it enhances decision-making, service delivery, transparency, and civic participation through data-driven tools, digital platforms, and emerging technologies such as AI, IoT, and blockchain. While often positioned as a pathway toward sustainability and inclusivity, existing research on smart governance remains fragmented, particularly regarding its relationship to urban sustainability. This study addresses that gap through a systematic literature review using the PRISMA methodology, synthesizing theoretical models, empirical findings, and diverse case studies. It identifies key enablers—such as digital infrastructure, data governance, citizen engagement, and institutional capacity—and highlights enduring challenges including digital inequity, data security concerns, and institutional inertia. In response to this, the study proposes a multidimensional framework that integrates governance, technology, and sustainability, offering a holistic lens through which to understand and guide urban transformation. This framework underscores the importance of balancing technological innovation with equity, resilience, and inclusivity, providing actionable insights for policymakers and planners navigating the complexities of smart cities and urban development. By aligning smart governance practices with the United Nations’ sustainable development goals (SDG)—particularly SDG 11 on sustainable cities and communities—the study offers a strategic roadmap for fostering resilient, equitable, and digitally empowered urban futures. Full article
(This article belongs to the Collection Smart Governance and Policy)
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23 pages, 1099 KiB  
Article
Assessing the Determinants of Energy Poverty in Jordan Based on a Novel Composite Index
by Mohammad M. Jaber, Ana Stojilovska and Hyerim Yoon
Urban Sci. 2025, 9(7), 263; https://doi.org/10.3390/urbansci9070263 - 8 Jul 2025
Viewed by 1191
Abstract
Energy poverty, resulting from poor energy efficiency and economic and social barriers to accessing appropriate, modern, and sustainable energy services, remains a critical issue in Jordan, a country facing growing climate pressures, particularly given its history of rapid urbanization. This study examines energy [...] Read more.
Energy poverty, resulting from poor energy efficiency and economic and social barriers to accessing appropriate, modern, and sustainable energy services, remains a critical issue in Jordan, a country facing growing climate pressures, particularly given its history of rapid urbanization. This study examines energy poverty through a multidimensional lens, considering its spatial and socio-demographic variations across Jordan. Drawing on data from 19,475 households, we apply a novel energy poverty index and binary logistic regression to analyze key determinants of energy poverty and discuss their intersection with climate vulnerability. The energy poverty index (EPI) is structured around four pillars: housing, fuel, cooling, and wealth. The results show that 51% of households in Jordan are affected by energy poverty. Contributing factors include geographic location, gender, age, education level, dwelling type, ownership of cooling appliances, and financial stability. The results indicate that energy poverty is both a socio-economic and infrastructural issue, with the highest concentrations in the northern and southern regions of the country, areas also vulnerable to climate risks such as drought and extreme heat. Our findings emphasize the need for integrated policy approaches that simultaneously address income inequality, infrastructure deficits, and environmental stressors. Targeted strategies are needed to align social and climate policies for effective energy poverty mitigation and climate resilience planning in Jordan. Full article
(This article belongs to the Special Issue Sustainable Energy Management and Planning in Urban Areas)
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71 pages, 8428 KiB  
Article
Bridging Sustainability and Inclusion: Financial Access in the Environmental, Social, and Governance Landscape
by Carlo Drago, Alberto Costantiello, Massimo Arnone and Angelo Leogrande
J. Risk Financial Manag. 2025, 18(7), 375; https://doi.org/10.3390/jrfm18070375 - 6 Jul 2025
Viewed by 672
Abstract
In this work, we examine the correlation between financial inclusion and the Environmental, Social, and Governance (ESG) factors of sustainable development with the assistance of an exhaustive panel dataset of 103 emerging and developing economies spanning 2011 to 2022. The “Account Age” variable, [...] Read more.
In this work, we examine the correlation between financial inclusion and the Environmental, Social, and Governance (ESG) factors of sustainable development with the assistance of an exhaustive panel dataset of 103 emerging and developing economies spanning 2011 to 2022. The “Account Age” variable, standing for financial inclusion, is the share of adults owning accounts with formal financial institutions or with the providers of mobile money services, inclusive of both conventional and digital entry points. Methodologically, the article follows an econometric approach with panel data regressions, supplemented by Two-Stage Least Squares (2SLS) with instrumental variables in order to control endogeneity biases. ESG-specific instruments like climate resilience indicators and digital penetration measures are utilized for the purpose of robustness. As a companion approach, the paper follows machine learning techniques, applying a set of algorithms either for regression or for clustering for the purpose of detecting non-linearities and discerning ESG-inclusion typologies for the sample of countries. Results reflect that financial inclusion is, in the Environmental pillar, significantly associated with contemporary sustainability activity such as consumption of green energy, extent of protected area, and value added by agriculture, while reliance on traditional agriculture, measured by land use and value added by agriculture, decreases inclusion. For the Social pillar, expenditure on education, internet, sanitation, and gender equity are prominent inclusion facilitators, while engagement with the informal labor market exhibits a suppressing function. For the Governance pillar, anti-corruption activity and patent filing activity are inclusive, while diminishing regulatory quality, possibly by way of digital governance gaps, has a negative correlation. Policy implications are substantial: the research suggests that development dividends from a multi-dimensional approach can be had through enhancing financial inclusion. Policies that intersect financial access with upgrading the environment, social expenditure, and institutional reconstitution can simultaneously support sustainability targets. These are the most applicable lessons for the policy-makers and development professionals concerned with the attainment of the SDGs, specifically over the regions of the Global South, where the trinity of climate resilience, social fairness, and institutional renovation most significantly manifests. Full article
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22 pages, 1152 KiB  
Article
Human Safety in Light of the Economic, Social and Environmental Aspects of Sustainable Development—Determination of the Awareness of the Young Generation in Poland
by Ewa Chomać-Pierzecka, Bartosz Błaszczak, Szymon Godawa and Izabella Kęsy
Sustainability 2025, 17(13), 6190; https://doi.org/10.3390/su17136190 - 5 Jul 2025
Viewed by 469
Abstract
The UN’s “Global Agenda for Change” focused on global challenges, with the aim of improving quality of life. The focus on People, Planet, Prosperity, Peace, Partnership, and Integrated Action (EU) orients its efforts towards socially needed change. Although the above perspectives, which ultimately [...] Read more.
The UN’s “Global Agenda for Change” focused on global challenges, with the aim of improving quality of life. The focus on People, Planet, Prosperity, Peace, Partnership, and Integrated Action (EU) orients its efforts towards socially needed change. Although the above perspectives, which ultimately shape the goals of sustainable development, refer in effect to the security of the functioning of societies and economies, this issue has not been sufficiently explored in the literature. Taking the above into account, this paper explains the aspect of people’s sustainable security and well-being, and also indicates the importance of determining the social competences needed for a broadly understood sustainable future, which is the main goal of this article. Considering the importance of sustainable awareness among the younger generation, who are responsible for the future modeling of the pace and direction of sustainable changes, the analysis of the literature in the practical findings was supported by qualitative and quantitative methods, as well as statistical analysis techniques using PQstat software, to ensure in-depth research. The results confirm that the studied population generally has good knowledge of the idea of sustainable development. Importantly, this population combines development in a sustainable direction with actions to strengthen people’s safety and well-being. It should be noted that the studied population is most strongly aware of the environmental pillar of sustainable development, suggesting potential to improve knowledge in this area—which is crucial for effective development towards a safe future and important for future decision-makers (the young generation). The findings can serve as a source of information for teams designing study programs and information campaigns on sustainable development in order to further strengthen social education in the studied area. Full article
(This article belongs to the Section Health, Well-Being and Sustainability)
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22 pages, 389 KiB  
Concept Paper
Displaced Communities: Can They Be Healthy?
by Iris Posklinsky, Ram A. Cnaan, Hani Nouman, Limor Musayell and Odeya Shabtai Getahun
Societies 2025, 15(7), 187; https://doi.org/10.3390/soc15070187 - 4 Jul 2025
Viewed by 523
Abstract
Emergency displacement has become an increasingly salient global phenomenon, precipitated by the intensification of climate crises and persistent geopolitical conflicts. These events forcibly displace millions each year and generate complex social, political, and institutional challenges. While the literature on displacement is expanding, much [...] Read more.
Emergency displacement has become an increasingly salient global phenomenon, precipitated by the intensification of climate crises and persistent geopolitical conflicts. These events forcibly displace millions each year and generate complex social, political, and institutional challenges. While the literature on displacement is expanding, much of it centers on individual and household experiences, often overlooking the collective dimensions of displacement. This article addresses this gap by critically examining the concept of the displaced community, a term used to describe collectivities formed in host societies comprising individuals who have been forcibly uprooted. The article undertakes a conceptual investigation of displaced communities, seeking to define their constitutive features while accounting for their internal heterogeneity and contextual variability. To sharpen analytical clarity, the study contrasts displaced communities with healthy communities, thereby situating two polar ends of a continuum. Based on these two types of community, the question arises, “can displaced communities be healthy communities?” The article advances a conceptual model of a healthy displaced community, positing that such a construct extends conventional understandings of resilience by foregrounding the processual dynamics of recovery and adaptation. Specifically, it is argued that community health in contexts of forced displacement must be understood as the outcome of iterative processes intentionally involving community-based intervention, empowerment, and long-term sustainability. Drawing on published case studies and empirical accounts of work with displaced populations, the article demonstrates how these three pillars—community intervention, empowerment, and sustainability—are implemented in practice. It concludes with policy and practice recommendations designed to prevent further deterioration and promote the development of health and well-being within displaced communities. Full article
(This article belongs to the Special Issue Building Healthy Communities)
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22 pages, 4096 KiB  
Review
AI, Optimization, and Human Values: Mapping the Intellectual Landscape of Industry 4.0 to 5.0
by Albérico Travassos Rosário and Ricardo Jorge Gomes Raimundo
Appl. Sci. 2025, 15(13), 7264; https://doi.org/10.3390/app15137264 - 27 Jun 2025
Viewed by 424
Abstract
This study conducts a systematic bibliometric literature review to explore the conceptual and technological transition from Industry 4.0 to Industry 5.0, focusing on the roles of artificial intelligence (AI), optimization, and human values. Applying the PRISMA 2020 protocol, the analysis includes 53 peer-reviewed [...] Read more.
This study conducts a systematic bibliometric literature review to explore the conceptual and technological transition from Industry 4.0 to Industry 5.0, focusing on the roles of artificial intelligence (AI), optimization, and human values. Applying the PRISMA 2020 protocol, the analysis includes 53 peer-reviewed sources from the Scopus database, emphasizing the integration of advanced technologies such as cyber–physical systems, the Internet of Things, collaborative robotics, and explainable AI. While Industry 4.0 is marked by intelligent automation and digital connectivity, Industry 5.0 introduces a human-centric paradigm emphasizing sustainability, resilience, and co-creation. The findings underscore the significance of human–machine collaboration, process personalization, AI education, and ethical governance as foundational pillars of this new industrial era. This review highlights the emerging role of enabling technologies that reconcile technical performance with social and environmental values, promoting a more inclusive and sustainable model for industrial development. Full article
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26 pages, 2171 KiB  
Review
Location–Routing Problems with Sustainability and Resilience Concerns: A Systematic Review
by Bruna Figueiredo, Rui Borges Lopes and Amaro de Sousa
Logistics 2025, 9(3), 81; https://doi.org/10.3390/logistics9030081 - 24 Jun 2025
Viewed by 708
Abstract
Background: Location and distribution decisions are key to efficient logistics network design and are often addressed in an integrated manner as Location–Routing Problems (LRPs). Today, sustainability and resilience must be considered when designing competitive networks. This systematic review examines how and at [...] Read more.
Background: Location and distribution decisions are key to efficient logistics network design and are often addressed in an integrated manner as Location–Routing Problems (LRPs). Today, sustainability and resilience must be considered when designing competitive networks. This systematic review examines how and at what decision level both concerns are explored in LRPs, highlighting trends and future research challenges. Methods: A search was conducted in the Scopus database on 3 January 2024. Articles not written in English or lacking a sustainability or resilience focus were excluded. The 36 most-cited articles were selected and analyzed descriptively and theoretically, considering their approaches to sustainability and resilience, as well as the decision levels at which these approaches were considered. The studies were also analyzed based on model features and solving approaches. Results: Our findings indicated that social sustainability was the most neglected. The environmental pillar was often focused on minimizing atmospheric pollution from distribution. Regarding resilience, proactive and reactive strategies were employed to minimize disruption costs and risks and maximize network reliability. Conclusions: Research on sustainable and resilient LRPs is growing, but remains fragmented. Future studies should explore the integration of social impacts, uncertainty modeling, and real-world applications. Stronger alignment with decision maker needs and more holistic evaluation frameworks are essential to support resilient and sustainable network design. Full article
(This article belongs to the Section Sustainable Supply Chains and Logistics)
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32 pages, 1015 KiB  
Systematic Review
Telework for a Sustainable Future: Systematic Review of Its Contribution to Global Corporate Sustainability (2020–2024)
by Mauro Adriel Ríos Villacorta, Emma Verónica Ramos Farroñán, Roger Ernesto Alarcón García, Gabriela Lizeth Castro Ijiri, Jessie Leila Bravo-Jaico, Angélica María Minchola Vásquez, Lucila María Ganoza-Ubillús, José Fernando Escobedo Gálvez, Verónica Raquel Ríos Yovera and Esteban Joaquín Durand Gonzales
Sustainability 2025, 17(13), 5737; https://doi.org/10.3390/su17135737 - 22 Jun 2025
Viewed by 488
Abstract
The COVID-19 crisis has turned teleworking from a minority option into an imposed and generalized way of life and has called into question its contribution to corporate sustainability. The present review is the first systematic review of the effects of telework on the [...] Read more.
The COVID-19 crisis has turned teleworking from a minority option into an imposed and generalized way of life and has called into question its contribution to corporate sustainability. The present review is the first systematic review of the effects of telework on the environmental, social, and economic pillars of corporate sustainability in the scholarly literature published from 2020 to 2024. A total of 50 studies from three databases (Scopus, Science Direct, and Taylor and Francis) were reviewed according to PRISMA guidelines by both a data bibliometric analysis and narrative synthesis. The findings show that telework has the potential to improve environmental sustainability by decreasing commuting emissions (29–54% depending on its deployment intensity), but rebound effects such as increased residential energy use work against this (in part) positive regard. From a social point of view, telework is double-edged between helping balance personal and work life and possessing the potential to lead to greater isolation and aggravate existing inequalities, particularly in developing countries. Economically, it drives operational costs down and expands the talent pool, with micro-, meso-, and macroeconomic impacts. The possibility of telework as a tool of sustainable development is substantially moderated by organizational culture, digital infrastructure, sociodemographic reality, and even the physical environment. We argue that telework is a potentially transformative driver of corporate sustainability if deployed strategically within a given context; however, disciplinary fragmentation and methodological lacunae in common metrics remain, especially with regard to long-term effects and implementation in developing economies. Full article
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25 pages, 283 KiB  
Article
Low-Carbon Transformation and Common Prosperity: An Analysis of the “Inverted U-Shaped” Relationship
by Ge Jiang and Guilin Dai
Sustainability 2025, 17(13), 5712; https://doi.org/10.3390/su17135712 - 21 Jun 2025
Viewed by 422
Abstract
Low-carbon transformation and common prosperity are critical pillars of China’s economic growth. To explore the mechanism relating the two, this paper analyzes how carbon efficiency influences the urban–rural income gap, including its transmission mechanism and heterogeneity, and uses panel data from 240 Chinese [...] Read more.
Low-carbon transformation and common prosperity are critical pillars of China’s economic growth. To explore the mechanism relating the two, this paper analyzes how carbon efficiency influences the urban–rural income gap, including its transmission mechanism and heterogeneity, and uses panel data from 240 Chinese prefectural cities (2006–2019). The results reveal an “inverted U-shaped” relationship between the low-carbon transition and urban–rural income gap. Specifically, as the carbon emission efficiency improves, the impact of the low-carbon transition on the urban–rural income gap changes from positive to negative. This finding remains robust under robustness tests. The heterogeneity test indicates that the “inverted U-shaped” relationship exhibits regional heterogeneity, resource endowment heterogeneity, economic development stage heterogeneity, and urban–rural income gap level heterogeneity. Furthermore, urban low-carbon transition influences the urban–rural income gap through industrial structure, employment structure, and human capital. This paper discusses the combination of low-carbon transformation and common prosperity, and takes into account both ecological sustainability and social sustainability. The findings of this paper offer policy proposals for advancing the achievement of dual-carbon goals and common prosperity, and provide references for developing countries. Full article
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24 pages, 519 KiB  
Article
Measuring Inclusive Growth in Developing Countries: Composite Index Approach and Sectoral Transformation Analysis
by Tatevik Mkrtchyan, Ani Khachatryan and Svetlana Ratner
J. Risk Financial Manag. 2025, 18(6), 336; https://doi.org/10.3390/jrfm18060336 - 19 Jun 2025
Viewed by 682
Abstract
Inclusive growth is increasingly recognized as being critical to sustainable development, particularly in the context of rising income inequality and social polarization around the globe. Effective policy requires robust measurement, prompting the need to move beyond GDP and supplement traditional economic indicators. This [...] Read more.
Inclusive growth is increasingly recognized as being critical to sustainable development, particularly in the context of rising income inequality and social polarization around the globe. Effective policy requires robust measurement, prompting the need to move beyond GDP and supplement traditional economic indicators. This study proposes a novel inclusive growth index (IGI) for 73 developing countries. The index is constructed using factor analysis with principal component analysis (PCA) across four pillars: economy, living conditions, equality, and governance. Our results reveal significant heterogeneity among developing countries, largely driven by variations in economic development and governance. Further analysis using OLS regression explores the impact of sectoral transformation, demonstrating a statistically significant positive relationship between shifts from the agricultural to the service sector and the IGI. These findings provide valuable insights for policymakers seeking to create more opportunities and target interventions to achieve more inclusive growth in developing economies. Full article
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26 pages, 456 KiB  
Article
ESG Risks and Market Valuations: Evidence from the Energy Sector
by Rahul Verma and Arpita A. Shroff
Int. J. Financial Stud. 2025, 13(2), 113; https://doi.org/10.3390/ijfs13020113 - 18 Jun 2025
Viewed by 866
Abstract
The link between ESG and financial performance is still under debate. In this study, we explore which aspects of ESG specifically drive market valuations through both systematic and idiosyncratic risk channels. We analyze the impact of the three core ESG pillars, 10 subcategories, [...] Read more.
The link between ESG and financial performance is still under debate. In this study, we explore which aspects of ESG specifically drive market valuations through both systematic and idiosyncratic risk channels. We analyze the impact of the three core ESG pillars, 10 subcategories, and associated controversies on market valuations in the energy sector. This analysis reveals that the environmental factor has a stronger impact (regression coefficient = 0.05) than the governance factor (regression coefficient = 0.003), emphasizing the need to prioritize environmental performance in ESG strategies. The positive coefficients for environmental resource use (0.005) and innovation (0.008) indicate that investments in efficiency and clean technologies are beneficial, while the negative coefficient for emissions (−0.004) underscores the risks associated with poor emissions management. These findings suggest that environmental risks currently outweigh governance risks for the energy sector, reinforcing the importance of aligning governance practices with environmental goals. To maximize ESG effectiveness, energy firms should focus on measurable improvements in resource efficiency, innovation, and emissions reduction and transparently communicate this progress to stakeholders. The evidence suggests that energy firms approach the ESG landscape differently, with sustainability leaders benefiting from higher valuations, particularly when ESG efforts are aligned with core competencies. However, many energy companies under-invest in value-creating environmental initiatives, focusing instead on emission management, which erodes value. While they excel in emission control, they lag in innovation, missing opportunities to enhance valuations. This underscores the potential for ESG risk analysis to improve portfolio performance, as sustainability can both create value and mitigate risks by factoring into valuation equations as both risks and opportunities. This study uniquely contributes to the ESG–financial performance literature by disentangling the specific ESG dimensions that drive market valuations in the energy sector, revealing that value is created not through emission control but through strategic alignment with eco-innovation, governance, and social responsibility. Full article
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