ESG strategy for regional development: economic and financial aspects

Abstract

The issue of the prospective development of regions remains highly relevant from both theoretical and practical perspectives. In recent years, the ESG (Environmental, Social, Governance) concept has become a key factor in the transformation of businesses and regions amid global challenges. The aim of this article is to explore the prospects for sustainable regional development within the framework of the ESG strategy, which can become a driving force for both regional and national economic growth. The research methodology is based on the use of systems analysis methods (structuring and systematization of data, statistical methods for analyzing dynamics, comparison), as well as traditional scientific research methods, including graphical and tabular analysis. The study also employs methods of logical and historical analysis to ensure consistency of the presented results and their correlation with practical realities. Results. To achieve this goal, the paper provides an overview of domestic and international research on sustainable regional development and considers the global evolution of the sustainable development concept and ESG strategy. The study substantiates that environmental, economic, and social development directions shape the current agenda for sustainable regional development based on the ESG strategy and readiness to face modern challenges. The paper identifies that within the ESG strategy framework, a new quality of finance—sustainable finance—is emerging, which has become a new trend in investor financial policy. It also emphasizes the need to promote a socially responsible investment approach, which implies funding only those companies whose activities do not harm the environment and contribute to solving regional economic issues.Moreover, the study justifies the importance of monitoring the development of regional socio-economic systems based on ESG strategy principles to determine the vector of sustainable development and make timely adjustments. The current state and directions of ESG strategy implementation in Ukraine are also analyzed. It is found that for domestic businesses, the adoption of ESG principles will enhance resilience, competitiveness, and responsibility. For companies aiming to integrate into the global economy, ESG implementation will facilitate cooperation with international partners and entry into the EU market. Conclusion. Implementing the ESG strategy in regional development will yield positive economic and financial outcomes. The orientation toward and broad implementation of environmental, social, and governance factors is a crucial tool for achieving regional sustainable development goals, unlocking opportunities for green investment, and attracting foreign capital. The practical significance of the study lies in substantiating economic tools for developing strategic regional development plans and implementing effective economic and financial policies based on ESG principles.