The integration of the concept of environment, social, and governance (ESG) into trade and investment to contribute to the Sustainable Development Goals (SDGs) is becoming a new consensus. ESG considerations are increasingly crucial in national and regional policies for sustainable development strategies and regulatory frameworks, highlighting the role of governments in shaping the landscape by incentivizing companies to adopt sustainable practices, disclose ESG information, and integrate social and environmental factors into decision-making. This also emphasizes the role of international investment agreements in coordinating trade, investment, and sustainable development, as they form a legal framework that is conducive to enhancing the transparency and predictability of the international investment ecosystem, thereby reducing uncertainties and prompting long-term and stable investment. While ESG and sustainability change the way businesses, policymakers, and rule-makers make decisions, trade and investment become pivotal conduits for operationalizing SDG-related global priorities.
This paper explores the growing relevance of ESG principles in trade and investment as they gain traction not only in the conduct of businesses but also in national policies, corporate governance, and regulatory frameworks. It aims to examine the ESG landscape in the Philippines and the region, understand its potential to enhance trade and investment toward achieving the SDGs, and explore strategies for effective ESG adoption. The results highlight varying responses of SDGs to trade and investment indicators. With respect to ESG interactions, the results indicate that the influence of trade and investment improves when integrated with ESG.
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