Transforming towards sustainable digital futures: Global interactions between ESG and digitalisation indices
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Abstract
This study investigates the global interconnectedness between digitalization and Environmental, Social, and Governance (ESG) performance using the Quantile-on-Quantile (QQ) Connectedness approach. The analysis employs the S&P 500 ESG Tilted Index, MSCI World ESG Leaders Index, and STOXX Global Digitalisation Index to evaluate the dynamic relationships between sustainability indices and market indicators of digitalization. The findings reveal strong and positive connectedness between digitalization and ESG indices, particularly at the lower and upper tails of the distribution. Moreover, sustainability indices generally act as dominant transmitters toward digital technology indices, whereas digitalization indices occasionally influence ESG indices during specific periods. These results indicate that sustainability-driven investment flows play a defining role in shaping the digital sector globally. The study contributes to the literature by providing a holistic and multidimensional assessment of the digitalization ESG nexus and offers strategic implications for investors, policymakers, and firms. Additionally, the findings highlight the critical importance of sustainable technology investments and digital transformation strategies for corporate performance.
Keywords
Abstract
This study investigates the global interconnectedness between digitalization and Environmental, Social, and Governance (ESG) performance using the Quantile-on-Quantile (QQ) Connectedness approach. The analysis employs the S&P 500 ESG Tilted Index, MSCI World ESG Leaders Index, and STOXX Global Digitalisation Index to evaluate the dynamic relationships between sustainability indices and market indicators of digitalization. The findings reveal strong and positive connectedness between digitalization and ESG indices, particularly at the lower and upper tails of the distribution. Moreover, sustainability indices generally act as dominant transmitters toward digital technology indices, whereas digitalization indices occasionally influence ESG indices during specific periods. These results indicate that sustainability-driven investment flows play a defining role in shaping the digital sector globally. The study contributes to the literature by providing a holistic and multidimensional assessment of the digitalization ESG nexus and offers strategic implications for investors, policymakers, and firms. Additionally, the findings highlight the critical importance of sustainable technology investments and digital transformation strategies for corporate performance.
