Circular‐ESG Model for Regenerative Transition

This paper presents a Cartesian model of sustainability by a novel integration of Circular Economy principles and ESG (Environmental, Social, and Governance) criteria to explicitly establish a clear path for closing the loops of negative social and environmental externalities. As global sustainability transformations accelerate, they bring both opportunities and inherent financial risks and social uncertainties. Historically, economic development has often been achieved at the expense of environmental balance. The contemporary challenge is to attain a dynamic equilibrium between natural and socio-economic systems. We introduce an integrated, multidisciplinary, and dynamic framework for studying and managing sustainability transitions. Our innovative 4-quadrant framework utilizes a Cartesian coordinate system to map the impacts of various business models on natural and socio-economic systems, spanning from linear open-loop to circular closed-loop ESG models. The framework is data-driven, employing normalized coordinates (-1 to 1) to facilitate empirical analysis and the establishment of temporal Key Performance Indicators. By integrating the Human Development Index within ecological limits, our model targets regenerative development that harmonizes human progress with planetary boundaries. This versatile and robust framework serves as a practical tool for businesses, households, organizations, and policymakers to navigate the complexities of sustainable development, promoting innovation and fostering a just transition towards regenerative practices. Our approach provides a comprehensive roadmap for achieving high human development within the planet's ecological limits, contributing significantly to the broader discourse on sustainability science and management.