Country ESG Sustainability Index as a Management and Regulatory Feedback Tool

Contemporary ESG (Environmental, Social, and Governance) regulation creates costs and risks for businesses, which are associated with the stringency of requirements. This article demonstrates that the key source of these problems is the fragmentation of legal regulation, the inconsistency of reporting standards, and the methodological heterogeneity of ESG indices. Based on a comparative legal analysis of eight jurisdictions (the US, EU, China, India, Brazil, Russia, South Africa, and Kazakhstan), three models of ESG regulation are identified: prescriptive, market-oriented, and state-centralized. It is shown that extraterritorial pressure (CBAM, CSDDD) and internal regulatory conflicts (e.g., in the US) are associated with increased compliance costs, especially for emerging economies. An empirical analysis revealed significant divergence in the assessments and dynamics of ESG ratings from various agencies. The results obtained are consistent with the findings of other researchers who document discrepancies in ESG assessments reaching approximately 50–60%. This makes global indices of limited applicability for regulatory purposes. In response to the identified issues, a country-specific ESG index integrated into a closed-loop feedback management system was proposed. A two-stage methodology was developed: calculating a company index (taking into account regulatory burden, extraterritorial pressure, and adaptability) and aggregating it into a country index based on macrostatistics, with the ability to transition to big data aggregation. The results can be used by national regulators to improve the comparability of ESG data and differentiate government support measures.