Functional analysis of long-run ESG trajectories across world regions

This study examines long-term regional differences in sustainability-related development using twelve World Bank indicators grouped into Environmental, Social, and Governance dimensions. Each indicator is treated as a functional time series over the period 1991–2018, allowing us to analyse both level differences across regions and the evolution of these differences over time. The functional ANOVA results reveal clear and persistent regional gaps in several Environmental and Governance variables, while selected Social indicators show gradual convergence, particularly in health-related outcomes. Demographic, labour-market, and institutional indicators, however, continue to display substantial variation across regions. By adopting a functional data perspective, the analysis captures the shape and dynamics of regional trajectories rather than relying on static comparisons. The findings highlight how sustainability-related development progresses unevenly across the world and demonstrate the usefulness of functional methods for studying long-run variation in ESG-related domains.