ABSTRACT South Asia, home to nearly one‐quarter of the world's population, faces mounting ecological and geophysical stress, with regional biocapacity and terrestrial integrity declining by more than 15% since 2000. Yet, existing sustainability assessments either rely on partial indicators or ignore economic scale effects. This study develops an integrated Economic‐Environmental‐Social‐Governance (EC‐ESG) framework to identify how economic growth pressures interact with environmental, social and governance capacities to shape ecological sustainability. Using principal component analysis (PCA), a composite EC‐ESG index is constructed, and panel data from seven South Asian countries (2000–2023) are analysed with cross‐sectionally augmented ARDL (CS‐ARDL) and augmented mean group (AMG) estimators. Ecological sustainability is measured through the load capacity factor (LCF). Results show that a 1% rise in GDP reduces LCF by 0.15%, while governance improvements offset nearly 80% of this decline. Country‐level estimates reveal three distinct structural clusters: (i) resource‐intensive economies such as India, Pakistan and Bangladesh; (ii) transitional systems including Sri Lanka and Nepal; and (iii) governance‐driven, resilience‐oriented cases represented by Bhutan and the Maldives. The composite EC‐ESG index remains negatively associated with LCF, indicating the region has not yet decoupled development from ecological degradation. These findings highlight the need to align governance reforms (SDG 16) with renewable energy investment (SDG 7) and to pursue country‐specific strategies. The EC‐ESG framework offers a replicable model for developing regions seeking to reconcile growth with ecological limits.
Zhou et al. (Wed,) studied this question.