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Integrating ESG Framework with Social Sustainability Metrics: A Dual SEM-PLS Formative–Reflective Model Perspective

Year: 2025

Type: article

Abstract: Environmental, Social, and Governance (ESG) frameworks have gained prominence in driving corporate sustainability and ethical leadership. Despite their significance, limited researches have explored their direct influence on social sustainability outcomes within organizations. The present research examines the impact of ESG factors and ethical leadership on employee well-being, diversity, community engagement, and training. It highlights their role in fostering sustainability, governance transparency, and workplace inclusivity while aligning with key SDGs. Structural equation modeling–partial least squares (SEM-PLS) with formative–reflective assessment examines ESG variables, ethical leadership, and organizational outcomes. The sample size of 871 respondents ensured statistical validity and reliability. The study analyzes ESG characteristics, ethical leadership, and organizational results using SEM-PLS 4 using a formative–reflective measuring approach. The sample size of 871 respondents ensured statistical validity and reliability. The study indicates that ethical leadership and good governance improve employee well-being, diversity, inclusiveness, and community engagement, supporting SDG 3 (Good Health and Well-Being) and SDG 8 (Decent Work and Economic Growth). These results highlight the critical role of ESG practices in fostering a responsible, inclusive, and sustainable organizational culture, further promoting SDG 16 (Peace, Justice, and Strong Institutions). This research contributes to the growing discourse on ESG-driven leadership and its role in fostering long-term organizational resilience and social responsibility. These insights contribute to advancing sustainable business strategies and reinforcing ESG-driven organizational resilience.

Source: Sustainability

DOI: 10.3390/su17062566

Author: Abdulrahman Alhazemi

Institution: Jazan University

Language: English

Topic: Corporate Social Responsibility Reporting

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Reduced inequalities

Open Access status: gold

Estimated APC paid: $2,896