Transforming the UK ESG Finance Architecture for Productivity-Led Economic Growth 

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Offers robust causal evidence on ESG-producitivity link using DiD and IV methods, useful for future sustainable finance research.

🏢実務担当者:Corporate teams can benchmark potential productivity gains from ESG improvements and disclosure compliance, supporting business case.

🏛政策担当者:Provides concrete policy recommendations for disclosure mandates, green taxonomy, and pension fund allocation to sustainable investments.

This paper examines the critical nexus between Environmental, Social, and Governance (ESG) finance architecture and productivity-led economic growth in the United Kingdom. With UK productivity growth stagnating at approximately 0.7% annually since the 2008 financial crisissubstantially below the historical 2.1% trend-and a persistent £14 billion equity funding gap constraining high-growth enterprises, there is an urgent imperative to recalibrate the financial system toward sustainable value creation. Drawing on panel data analysis of 487 UK-listed firms (2015-2024) and employing fixed-effects regression models with instrumental variable estimation, this study investigates how ESG integration within the UK's financial architecture influences firmlevel productivity metrics and aggregate economic performance. The quantitative analysis reveals that firms in the top ESG performance quartile demonstrate 12.3% higher total factor productivity (TFP) and 8.7% superior labour productivity compared to bottom-quartile performers, with particularly pronounced effects in capital-intensive sectors. Furthermore, regression discontinuity design analysis of the 2023 UK Sustainability Disclosure Requirements (SDR) implementation indicates a 6.4% productivity premium among compliant firms within the first 18 months. The research employs a comprehensive methodological framework incorporating difference-in differences estimation, propensity score matching, and structural equation modelling to address endogeneity concerns and establish causal mechanisms. Key findings suggest that enhanced ESG disclosure transparency reduces information asymmetry by approximately 23%, lowering the cost of capital by an average 47 basis points and facilitating £26 billion in additional annual sustainable investment capacity. Policy recommendations advocate for: (1) mandatory transition plan disclosures aligned with International Sustainability Standards Board (ISSB) frameworks; (2) development of a science-based UK Green Taxonomy with mandatory reporting requirements; (3) regulatory incentives to channel pension fund capital toward productivity-enhancing ESG investments; and (4) establishment of an independent UK Sustainable Finance Institute to coordinate policy implementation. This research contributes to the nascent literature on sustainable finance and macroeconomic productivity by providing robust empirical evidence that strategic ESG integration represents not merely a corporate social responsibility exercise but a fundamental catalyst for restoring the UK's competitive position in global markets.

• openaire https://doi.org/10.2139/ssrn.6107527first seen 2026-05-14 21:40:29