A am, Alexand u e al.
A icle
Sus ainabili y epo ing in he EU-27: The impac o
na ional ESG ecosys ems and o ganiza ional implica ions
Am i ea u Economic
P o ided in Coope a ion wi h:
The Bucha es Uni e si y o Economic S udies
Sugges ed Ci a ion: A am, Alexand u e al. (2025) : Sus ainabili y epo ing in he EU-27: The impac
o na ional ESG ecosys ems and o ganiza ional implica ions, Am i ea u Economic, ISSN 2247-9104,
The Bucha es Uni e si y o Economic S udies, Bucha es , Vol. 27, Iss. 70, pp. 957-972,
h ps://doi.o g/10.24818/EA/2025/70/957
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Sus ainabili y Repo ing: Ca alys o O ganisa ional and P o essional Change
AE
Vol. 27 • No. 70 • Augus 2025 957
SUSTAINABILITY REPORTING IN THE EU-27: THE IMPACT OF NATIONAL
ESG ECOSYSTEMS AND ORGANIZATIONAL IMPLICATIONS
Alexand u A am1, Geo giana Ma ia Lungu2, Cos in Daniel A am3,
Luminița Popescu4, Daniel Tobă5 and Iulia-C is ina Ciu ea6
*
1) Timișoa a Wes Uni e si y, Timișoa a, Romania
2)3)4)5) Uni e si y o C aio a, C aio a, Romania
6) Bucha es Uni e si y o Economic S udies, Bucha es , Romania
Please ci e his a icle as:
A am, A., Lungu, G.M., A am, C.D., Popescu, L., Tobă,
D. and Ciu ea, I.C., 2025. Sus ainabili y Repo ing in he
EU-27: The Impac o Na ional ESG Ecosys ems and
O ganiza ional Implica ions. Am i ea u Economic, 27(70),
pp. 957-972.
DOI: h ps://doi.o g/10.24818/EA/2025/70/957
A icle His o y
Recei ed: 29 Ma ch 2025
Re ised: 6 May 2025
Accep ed: 8 June 2025
Abs ac
Sus ainabili y epo ing is a i al elemen ha enables s akeholde s o disce n how companies
comply wi h social, en i onmen al, and go e nance egula ions while assessing sus ainable
de elopmen . This s udy examines he na ional con ex ha in luences co po a e
sus ainabili y epo ing, emphasising he in e play be ween mac ole el ESG economic
condi ions and i m-le el disclosu es manda ed by amewo ks such as he Co po a e
Sus ainabili y Repo ing Di ec i e (CSRD). While p e ious s udies ocused on
o ganisa ional and concep -le el analysis, he o iginali y o his s udy lies in he di ec
e alua ion o na ional ESG-economic ecosys ems on he p epa edness o EU membe s a es
o sus ainabili y epo ing unde he new di ec i e. A mac oeconomic analysis o he EU-27
membe s a es was pe o med using key ESG and economic indica o s, wi h he p incipal
componen analysis gene a ing a composi e index o na ional pe o mance. Addi ionally, he
clus e ing o K-means e ealed di e en egional p o iles ha e lec di e ences in ESG
economic me ics. These indings ha e impo an implica ions, as coun ies wi h s onge
mac o indica o s encou age en i onmen s ha acili a e he adop ion o ad anced epo ing
me hods, while coun ies acing economic and ins i u ional challenges may equi e a ge ed
in e en ions o imp o e anspa ency and compliance. This app oach p o ides aluable
in o ma ion o policymake s and in es o s, emphasising he sys emic links be ween na ional
condi ions and e ec i e sus ainabili y epo ing a he o ganisa ional le el.
Keywo ds: sus ainabili y epo ing, ESG, p incipal componen analysis, K-means clus e ing,
decision-making p ocess.
JEL Classi ica ion: D83, M14, M48, Q58
*
Co esponding au ho , Iulia-C is ina Ciu ea – e-mail: iulia.ciu [email protected]. o
This is an Open Access a icle dis ibu ed unde he e ms o he C ea i e Commons
A ibu ion License, which pe mi s un es ic ed use, dis ibu ion, and ep oduc ion in
any medium, p o ided he o iginal wo k is p ope ly ci ed. © 2025 The Au ho (s).
AE
Sus ainabili y Repo ing in he EU-27:
The Impac o Na ional ESG Ecosys ems and O ganiza ional Implica ions
958 Am i ea u Economic
In oduc ion
Sus ainabili y is a majo end in mode n business. I mo i a es i ms o use s uc u ed plans o
look a hei en i onmen al, social, and go e nance (ESG) goals (Nițu, 2024). As mo e
businesses adop his iew, mo e schola s ocus on he p inciples o g een and ai de elopmen ,
especially since no e e yone bene i s om he g ow h o he economy (Ibou k and Raoui,
2023). And he ules o sus ainabili y a e no jus o he business ield. Acco ding o Dima and
Ghinea (2016), hey also belong in schools by looking a leade ship ends and making he
school mo e compe i i e. All o his shows how widely sus ainabili y plans a e used.
Repo s ha e long since shown a a he uns uc u ed iew o i m ESG pe o mance. A e y
apid change has ecen ly aken ha p ac ice o wha is now known as sus ainabili y epo ing,
he s uc u ed communica ion o he company's ESG pe o mance and commi men
ega ding sus ainable de elopmen o he b oade socie y. These would include de ailed
policies on he en i onmen , emissions and was es, human esou ces, and gene al social
policies, such as di e si y, equi y, and inclusion. In Romania, acco ding o OMFP 85/2024,
he epo indica es ha he sus ainabili y aspec is s a egically i al o ma ke
compe i i eness and de elopmen and, he e o e, can be used o es a e he de elopmen
depic ed by he i m. No mally, hese a e p epa ed in esponse o some in e na ionally
ecognised s anda d, such as ha o he Global Repo ing Ini ia i e (GRI). Sus ainabili y
epo s we e ounded in esponse o g ea e anspa ency and awa eness o s akeholde s as a
ounda ion o co po a e social esponsibili y ac i i ies o c ea e long- e m alue. Repo ing
unde CSR would hus be di ec ed a he o me o he wo, esponsible o c ea ing new
alue sys ems in en e p ises, since epo ing is he ounda ion o all he CSR ac i i ies se in
en e p ises in oduced by hese new alue sys ems, as s a ed in he Pa is Ag eemen o
Decembe 12, 2015.
Recen legisla i e changes ha e led o a majo ans o ma ion o he way companies epo
hei sus ainabili y ini ia i es. The new Co po a e Sus ainabili y Repo ing Di ec i e
(CSRD), which en e ed in o o ce in Janua y 2023, ex ends and de ails he cu en
equi emen s based on he p e ious non- inancial epo ing. Th ough CSRD, epo ing
becomes b oade and mo e s anda dised, emphasising no only ESG pe o mance and isk
exposu e, bu also sus ainabili y in eg a ion in o he business s a egy. A he same ime, he
di ec i e in oduces he “double ma e iali y” p inciple, asking companies o desc ibe bo h
he way sus ainabili y aspec s a ec hei ac i i y and he impac hei ope a ions ha e on he
en i onmen and socie y a la ge. Wi h he CSRD en y in o ma ion o ce, he new global
s anda ds IFRS S1 (Gene al Requi emen s o Sus ainabili y Repo ing) and IFRS S2
(Clima e Disclosu es) we e also launched. These amewo ks a e designed o guide
companies in p esen ing ma e ial sus ainabili y isks and oppo uni ies om he pe spec i e
o in es o s and o he s akeholde s. In Romania, hese egula ions a e ansposed h ough
OMFP 85/2024, which clea ly es ablishes he guidelines o he in eg a ion o ESG da a in o
he basic co po a e epo ing.
Despi e his p og ess, many o ganisa ions a e acing di icul ies, ei he due o he
complexi ies o he new s anda ds, he lack o adequa e in e nal compe encies, o he lack o
access o ESG da a in a s anda dised o ma . Fu he mo e, a ia ions in epo ing p ac ices
and he mo i a ions behind hem om one ju isdic ion o ano he hinde he genuine
compa abili y o in o ma ion. To o e come hese obs acles, i is essen ial ha companies,
egula o s, and all in e es ed pa ies collabo a e o apply uni o m equi emen s a he EU
le el.
Sus ainabili y Repo ing: Ca alys o O ganisa ional and P o essional Change
AE
Vol. 27 • No. 70 • Augus 2025 959
Based on hese eali ies and challenges, he main objec i e o his s udy is o e alua e how
he na ional ESG-economic con ex s o he EU-27 membe s a es a e p epa ed o e ec i ely
adop and implemen he CSRD equi emen s. To his end, we will cons uc a composi e
index o na ional p epa edness o sus ainabili y epo ing using P incipal Componen
Analysis (PCA), and we will iden i y egional ESG-economic pe o mance pa e ns h ough
K-means clus e ing, so as o p o ide p ac ical ecommenda ions o policymake s o he
cohe en and e icien implemen a ion o he new di ec i e.
1. Re iew o he specialised li e a u e
Sus ainabili y epo ing has gained p ominence wi hin he con e ging o ces o global
ins i u ions and academic esea ch. The In e na ional In eg a ed Repo ing Council (IIRC)
b ings oge he egula o s, in es o s, companies, s anda d-se ing bodies, accoun ing
p o essionals, and NGOs in a global coali ion aimed a de eloping he in eg a ed epo , which
is a concise co po a e documen o ien ed owa d use s' needs (IIRC, 2013). Th ough his
ini ia i e, all key playe s, such as s anda d-se e s, in es o s, and o he s akeholde s, collabo a e
o ha monise inancial and non inancial in o ma ion wi h sus ainabili y objec i es, hus
ensu ing clea communica ion o long- e m alue.
In eg a ed sus ainabili y in epo ing has al eady been shown o imp o e anspa ency,
accoun abili y, and s akeholde us , which is why in eg a ed epo s a e inc easingly p e e ed.
Resea ch indica es ha hese epo s, by o e ing a comp ehensi e iew o co po a e
pe o mance, signi ican ly imp o e anspa ency and accoun abili y (F iedman and Miles,
2002; Tihanyi, G a in and Geo ge, 2014; Ioannou and Se a eim, 2015), op imise long- e m
s a egic and ope a ional decision making o companies (Ioannou and Se a eim, 2015;
Waddock, Bodwell and Leigh, 2017), and s eng hen o ganisa ional epu a ion (Eps ein and
Roy, 2004). Addi ionally, hey acili a e in e disciplina y collabo a ion (Hahn and Kühnen,
2013), inc ease in es o engagemen (Ionescu e al., 2019), help manage complexi y (Dănescu
and Ma ei, 2020), and suppo alen a ac ion and e en ion (Zbuchea e al., 2019), hus
con e ing s a egic alue on co po a e go e nance. As i ms combine inancial epo ing wi h
ESG disclosu es (Clay on, Roge son and Rampedi, 2015; Camille i, 2018), he alignmen o
s a egy, inancial pe o mance, and ESG ou comes has d i en he adop ion o in eg a ed
epo ing (S ubbs and Higgins, 2018). Schola s such as Thejo (2017), He zig and Schal egge
(2011) and Lozano (2015) emphasise ha sus ainabili y epo ing no only p omo es
anspa ency, bu also enhances public image c edibili y. To ha monise a ious s anda ds and
mee in es o needs, bodies such as he Sus ainabili y Accoun ing S anda ds Boa d (SASB)
and he In e na ional Sus ainabili y S anda ds Boa d (ISSB), es ablished in 2021, ha e
eme ged. The adop ion in 2022 o he new Co po a e Sus ainabili y Repo ing Di ec i e
(CSRD) and he de elopmen o Eu opean Sus ainabili y Repo ing S anda ds (ESRS) ma k a
ansi ion owa d a uni ied, comp ehensi e amewo k designed o inc ease he anspa ency
and compa abili y o sus ainabili y epo ing ac oss he en i e EU.
Recen academic li e a u e s esses subs an ial dispa i ies in sus ainabili y and epo ing
p ac ices in Eu opean coun ies. Quan i a i e analyses o he Sus ainable De elopmen Goals
(SDGs) con i m ha Eu ope ad ances he e ogeneously: No dic coun ies (such as Sweden)
s and ou posi i ely, while o he s lag a behind (Anselmi e al., 2023). S udies ocused on
ESG indica o s show simila esul s: No dic coun ies achie e op na ional ESG sco es, as
opposed o economies in sou he n and eas e n Eu ope, which consis en ly ank a he bo om
AE
Sus ainabili y Repo ing in he EU-27:
The Impac o Na ional ESG Ecosys ems and O ganiza ional Implica ions
960 Am i ea u Economic
(Pineau e al., 2022; Copcă e al., 2024; Cojoca u e al., 2025). In ac , some wes e n and
no he n Eu opean s a es ha e ad anced ins i u ional ecosys ems o ESG epo ing, while
o he s a e only in he ea ly s ages o de eloping a sus ainable epo ing amewo k
(Singhania and Saini, 2022). The EU policy app oach implici ly acknowledges hese
dispa i ies: Eu opean au ho i ies emphasise he combina ion o s ingen ules wi h lexibili y
and he pa icipa ion o local s akeholde s. In he con ex o he new epo ing equi emen s,
a mul i-ac o model ha includes dialogue wi h na ional au ho i ies and epo ing en i ies is
deemed essen ial o ensu e e ec i e implemen a ion o sus ainabili y s anda ds (Anselmi e
al., 2023).
Mos esea ch o da e has ocused ei he a he mic o le el (companies and hei epo ing
p ac ices), on mac o indica o s o o e all sus ainabili y ( o example, composi e sus ainable
de elopmen indices), o on concep ual no ions. Unlike hese app oaches, he p esen s udy
in es iga es he ela ionship be ween na ional ESG economic ecosys ems and he eadiness o
he EU-27 s a es o implemen he CSRD, a pe spec i e ha has been ela i ely unadd essed in
he cu en li e a u e. Ou con ibu ion lies in he in eg a ion o en i onmen al, social,
go e nance, and economic de elopmen ac o s in o a na ional ESG economic composi e index,
cons uc ed using P incipal Componen Analysis (PCA). We hen apply clus e ing algo i hms
(K-means) o g oup he EU-27 s a es in o homogeneous egional p o iles based on hei ESG
economic cha ac e is ics. This da a-d i en me hodological app oach allows he iden i ica ion
o sys emic pa e ns o ins i u ional capaci y and na ional p epa edness.
2. Resea ch Me hodology
A mac oeconomic analysis was conduc ed in he 27 membe s a es o he EU (EU-27) wi h
a se o en i onmen al indica o s (en i onmen al pe o mance index, CO2 emissions pe
capi a, o e all sha e o ene gy om enewable sou ces, municipal was e ecycling a e,
ci cula ma e ial use a e), social indica o s (human de elopmen index, digi al socie y and
economy index, people a isk o po e y o social exclusion, employmen a e, gende
employmen gap, yea s o heal hy li e a bi h), go e nance indica o s (co up ion pe cep ion
index, indi iduals who used a websi e o an app o a public au ho i y in he las 12 mon hs,
ule o law sco e, poli ical s abili y, go e nmen e ec i eness sco e), and economic
indica o s (compe i i e sus ainabili y index, GDP pe capi a in PPS, sha e o go e nmen
budge alloca ions o esea ch and de elopmen in o al gene al go e nmen expendi u e,
go e nmen consolida ed g oss deb , en i onmen al ax e enues). These da a we e d awn
om public da abases such as Eu os a , he Eu opean Commission, he Wo ld Bank, Yale
Uni e si y, Camb idge Uni e si y, Ou Wo ld in Da a, and he Uni ed Na ions. Fo each
indica o , he mos ecen ly published alue was used (p edominan ly om 2023, wi h a small
pe cen age om 2022 and 2024). This app oach maximises da a cu ency, and a empo al
de ia ion o up o one yea does no signi ican ly a ec he compa abili y be ween s a es.
The indica o s we e used o pe o m he P incipal Componen Analysis (PCA), which
p oduced a single-dimensional index ha cap u ed he economic pe o mance o each
coun y on he ESG. K-means clus e ing was hen applied o e eal g oups o coun ies wi h
simila p o iles, he eby highligh ing egional pa e ns and p o iding a b oade compa a i e
amewo k o unde s anding ESG dynamics in he EU. Impo an ly, he alues esul ing
om bo h PCA and clus e analysis do no only ep esen composi e ESG and economic
pe o mance sco es; hey also e lec each coun y's abili y o nu u e an ins i u ional and
Sus ainabili y Repo ing: Ca alys o O ganisa ional and P o essional Change
AE
Vol. 27 • No. 70 • Augus 2025 961
egula o y en i onmen conduci e o sus ainabili y epo ing a he o ganisa ional le el. A
comple e ins i u ional amewo k, high s anda ds o go e nance, and majo in es men s in
echnology and digi isa ion a e impo an ac o s ha in luence he ease wi h which
companies can adop and implemen sus ainabili y epo ing s anda ds, such as IFRS S1,
IFRS S2 and he CSRD. In his con ex , mac o-le el indica o s se e as a p oxy o he
eadiness o indi idual o ganisa ions wi hin each coun y o mee he de ailed disclosu e and
anspa ency equi emen s imposed by he new Eu opean egula ions. Fo example, highe
sco es in go e nance and digi al in as uc u e can educe he cos and complexi y o
implemen ing hese s anda ds, whe eas coun ies wi h weake ins i u ional amewo ks may
equi e addi ional capaci y building o align wi h IFRS bes p ac ices. This app oach helps
b idge he gap be ween na ional economic condi ions on ESG and co po a e-le el epo ing
p ac ices, o e ing aluable insigh s o policy make s and s akeholde s who wan o imp o e
he o e all quali y and compa abili y o sus ainabili y epo s ac oss he EU.
Fi s , all a iables we e escaled so ha highe nume ical alues consis en ly ep esen ed
mo e a ou able ou comes. The p incipal componen analysis was hen conduc ed on he se
o a iables. Fo each EU-27 coun y, he i s h ee main componen s we e ex ac ed and
weigh ed acco ding o hei espec i e sha es o explained a iance, which cumula i ely
amoun s o app oxima ely 0.68, as seen in Table no. 1.
Table no. 1. P incipal Componen Va iance and No malised Weigh s
P incipal Componen
Raw Va iance Explained
No malised Weigh
PC1
0.46
0.68
PC2
0.12
0.17
PC3
0.10
0.14
To al
0.68
1.00
𝑤𝑘=𝜆𝑘
𝜆1+ 𝜆2+ 𝜆3 o 𝑘 = 1, 2, 3 (1)
whe e:
𝜆𝑘 = eigen alue co esponding o he 𝑘 h p incipal componen
𝑤𝑘 = weigh assigned o he 𝑘 h p incipal componen
These weigh ed componen s we e hen summed o cons uc a single composi e index. This
index, wi h highe alues indica ing be e o e all pe o mance, acili a es he classi ica ion
o coun ies and allows u he s a i ica ion in o quan iles, deciles, o pe cen iles.
𝐼𝑖= 𝑤1𝑃𝐶𝑖1 + 𝑤2𝑃𝐶𝑖2 + 𝑤3𝑃𝐶𝑖3 (2)
whe e:
𝑃𝐶𝑖𝑘 = sco e o coun y 𝑖 on he 𝑘 h p incipal componen
𝐼𝑖 = composi e index o coun y 𝑖
AE
Sus ainabili y Repo ing in he EU-27:
The Impac o Na ional ESG Ecosys ems and O ganiza ional Implica ions
962 Am i ea u Economic
Figu e no. 1. Be ween-Clus e and Wi hin-Clus e Sum o Squa es as a Func ion o k
Fo he second analysis, k-means clus e ing was applied by a ying he numbe o clus e s N
om wo o en, as seen in Table no. 2.
Table no. 2. K-Means Clus e ing Resul s by Numbe o Clus e s
No. o clus e s
BSS
WSS
P opo ion BSS/(BSS+WSS)
2
177.05
368.95
0.32
3
242.49
303.52
0.44
4
279.80
266.20
0.51
5
314.60
231.40
0.58
6
342.19
203.81
0.63
7
367.95
178.05
0.67
8
389.84
156.16
0.71
9
409.75
136.25
0.75
10
425.91
120.09
0.78
Fo each N, he be ween-clus e sum o squa es (BSS), wi hin-clus e sum o squa es (WSS),
and he p opo ion o explained a iance we e calcula ed. We no ice ha as N inc eases, BSS
inc eases due o he mo e e ined pa i ion o he da a, whe eas WSS declines because he
clus e s become inc easingly compac (Figu e no. 1). The p opo ion o explained a iance
g ows om app oxima ely 32% in wo clus e s o a ound 78% in en clus e s, meaning ha
addi ional clus e s accoun o p og essi ely mo e o he o al a ia ion. Howe e , gi en he
ac ha ou analysis is limi ed o he EU-27 coun ies, o in e p e abili y, we shall choose
a mos six clus e s, o a oid he o e i ing ha would esul om oo many clus e s and he
agmen a ion o he coun ies.
3. Resul s and deba es
The selec ion o he a iables included was guided by he objec i e o cap u ing a
comp ehensi e and mul idimensional iew o he s uc u al capaci y o each coun y o
suppo he epo ing o ESG. En i onmen al indica o s (e.g., CO₂ emissions, enewable
ene gy sha e, ecycling a e) e lec sus ainabili y pe o mance, while socioeconomic and
177.05
242.49 279.80
314.60
342.19
367.95
389.84
409.75
425.91
368.95
303.52
266.20
231.40
203.81
178.05
156.16
136.25
120.09
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
2345678910
BSS WSS
Sus ainabili y Repo ing: Ca alys o O ganisa ional and P o essional Change
AE
Vol. 27 • No. 70 • Augus 2025 963
ins i u ional indica o s (e.g., HDI, go e nmen e ec i eness, po e y isk, ule o law)
p o ide in o ma ion on go e nance quali y and social inclusion. The inclusion o
digi alisa ion me ics, such as he DESI index and e-go e nmen usage, di ec ly esponds o
he inc easing eliance on digi al in as uc u e in sus ainabili y epo ing. Economic
indica o s, such as GDP pe capi a and en i onmen al ax e enues, we e chosen o accoun
o inancial capaci y and commi men o g een ansi ions. Toge he , hese a iables align
wi h in e na ional amewo ks o sus ainable de elopmen and in eg a ed epo ing (GRI,
CSRD, IFRS S1/S2) and allow o a compa a i e spa ial analysis o ESG eadiness in EU
membe s a es.
Figu e no. 4. Pe cen ile dis ibu ion o he p incipal componen sco e
Figu e 4 g aphically summa ises he sco es o he main componen s de i ed om he PCA
analysis, which exp ess he dis ibu ion o he ESG economic pe o mances o he EU
coun ies in pe cen iles. This ep esen a ion allows o he iden i ica ion o signi ican
di e ences be ween na ions and he link be ween he sco es ecei ed and he le el o
willingness o implemen consis en sus ainable epo ing policies.
Al hough sus ainabili y epo ing occu s a he o ganisa ional le el, i is deeply in luenced
by na ional policies, digi al in as uc u e, and go e nance quali y. These mac ole el ac o s
no only shape he o e all business clima e, bu also de e mine he capaci y o companies o
adop and e ec i ely implemen ad anced sus ainabili y epo ing amewo ks. To cap u e
he s a us and pe o mance o a coun y in e ms o ESG and economic indica o s and, by
ex ension, i s eadiness o sus ainabili y epo ing, we c ea ed a single index using P incipal
Componen Analysis (PCA), which allows us o ank he EU-27 coun ies on a
unidimensional scale. A highe index alue indica es be e ESG and economic pe o mance,
which in u n sugges s a s onge ins i u ional and egula o y en i onmen ha suppo s
de ailed sus ainabili y disclosu es equi ed by s anda ds such as CSRD. Figu e 4 shows he
pe cen ile dis ibu ion o he p incipal componen sco es, anging om -4.360 o +3.583.
Because PCA in ol es s anda dising a iables and hen p ojec ing hem on o o hogonal axes
o maximal a iance, he esul ing sco es can span bo h nega i e and posi i e alues. The
coun ies wi h he highes sco es (+3.002 o +3.583) can be ound in No he n Eu ope
AE
Sus ainabili y Repo ing in he EU-27:
The Impac o Na ional ESG Ecosys ems and O ganiza ional Implica ions
964 Am i ea u Economic
(Denma k, Sweden, and Finland). These coun ies exhibi s ong go e nance, ad anced
digi al in as uc u e, and s ong en i onmen al policies. This combina ion c ea es a
a ou able en i onmen o companies o implemen e ec i e sus ainabili y epo ing
p ac ices. In he nex highes pe cen ile, which boas s he mos coun ies, wi h sco es anging
om -0.006 o +3.002, we ha e Wes e n Eu opean (I eland, F ance, Luxembou g, he
Ne he lands, Belgium, Ge many, Aus ia), 2/3 o he Bal ics (Es onia, Li huania) and ce ain
Cen al Eu opean ( he Czech Republic, Slo enia) coun ies. These coun ies also ha e a
ela i ely conduci e en i onmen o eliable ESG disclosu es.
Con e sely, he Sou he n Eu opean coun ies (I aly, Spain, Po ugal, Mal a, Cyp us) oge he
wi h he es o Cen al Eu ope ones (Poland, Slo akia, Hunga y), C oa ia (Sou heas ), and
La ia (Bal ics) clus e owa ds he lowe pe cen iles (sco es be ween -2.976 o -0.006),
whe eas eas e n Eu ope (Romania, Bulga ia) and G eece (Sou heas ) show he lowes
possible sco es (-4.360 o -2.976).). The unde lying implica ion o hese sco es is ha
coun ies wi h highe p incipal componen sco es, ound in No he n and Wes e n Eu ope,
a e be e posi ioned o implemen e ec i e sus ainabili y and ESG epo ing due o ac o s
such as s onge go e nance, well-es ablished egula o y amewo ks, highe le els o
in e es , and in es men in en i onmen al ac ions, o name a ew. Coun ies wi h lowe
sco es, compa ed, o en in sou he n and eas e n Eu ope, ace g ea e challenges in de eloping
consis en and anspa en epo ing p ac ices, gi en hei weake ins i u ional capaci y and
limi ed economic esou ces, which is why a a ge ed capaci y-building app oach mus be
adop ed o help hese coun ies align hei sus ainabili y epo ing amewo ks wi h
es ablished bes p ac ices.
Figu e no. 5. K-Means Clus e ing o EU-27 Coun ies by ESG
and Economic Indica o s (4 Clus e s)
To deepen ou s udy, we an a K-means clus e ing analysis so as o cap u e also he simila i ies
be ween he coun ies in he chosen dimensions, no jus how hey ank among each o he . Fo
n = 4 (Figu e no. 5, Table no. 4), he la ges clus e is he i s one, boas ing 15 ou o he o al
27 Eu opean coun ies. Coun ies in his g oup show mode a e o s ong pe o mance in mos
indica o s, combining easonably high index sco es (en i onmen al pe o mance index,
compe i i e sus ainabili y index) wi h a middle- ange GDP pe capi a. Besides his, hey
exhibi mode a ely a ou able go e nance measu es (co up ion pe cep ions, ule o law), bu
a e no a he e y op. These esul s sugges ha he clus e 1 na ions ha e es ablished a solid
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