Climate change and geopolitical conflicts: The role of ESG readiness.

Alam, Ashraful; Banna, Hasanul; Alam, Ahmed W.; Bhuiyan, Borhan U.; Mokhtar, Nur B.

Abstract

This study examines the relationship between climate change vulnerability and geopolitical risk using data on 42 countries from 1995 to 2021. Utilising two distinct indices, the climate vulnerability index (CVI) and the country-specific geopolitical risk (CGPR) indices, we find that countries with high vulnerability to climate change are more likely to experience geopolitical conflicts. Further analysis reveals that country-level overall economic, social, and governance (ESG) readiness significantly mitigates this detrimental effect. This moderation is mainly attributed to the social and governance readiness measures. Additional tests indicate that the mitigating role of ESG is more pronounced for countries with high institutional governance. These results remain resilient through a set of endogeneity tests using matched samples of countries generated through propensity score matching (PSM) estimation. Our findings suggest that addressing climate vulnerability is crucial to promoting global peace and geopolitical stability. [Abstract copyright: Copyright © 2024 The Authors. Published by Elsevier Ltd.. All rights reserved.]

• Journal Article Type: Article
• Acceptance Date: Feb 2, 2024
• Online Publication Date: Feb 9, 2024
• Publication Date: Feb 27, 2024
• Deposit Date: Feb 9, 2024
• Publicly Available Date: Feb 15, 2024
• Journal: Journal of environmental management
• Print ISSN: 0301-4797
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 353
• Pages: 120284
• DOI: https://doi.org/10.1016/j.jenvman.2024.120284
• Keywords: Geopolitical risk, Climate vulnerability, ESG readiness, Climate Change, Social Conditions, Institutional quality, Climate change