ESG and Urban Sustainable Development

The social advocacy of sustainable development and expanding super-cities such as Beijing seemed to be in a conflict, and so did the balance between economic growth and environmental protection. Environmental, social, and governance (ESG), a financial evaluation criterion encouraging sustainable development of firms, is frequently discussed in this context, especially in the fields of finance and microeconomics. Our research examined how ESG performances at the urban level have influenced urban sustainable expansion through innovatively created measurements of the overall conditions of ESG performances and sustainable progress in cities. Based on the newly created indexes, we found the positive effect of urban ESG development on urban sustainable development. Four mediating pathways, including financial sector, pollution treatment, social insurance, and efficiency of capital use, were found and tested. Further investigation shows that the effect of urban ESG development on urban sustainable development varies significantly. The effect is considerably positive in high-GDP cities but even reverse in low-GDP cities. Also, the effect performs better in the recent compared with the past.