Over the past decades, ESG has become a buzzword in corporate and policy discussions across Europe. We usually think of it in terms of companies – how they improve sustainability practices or market their social responsibility. But what happens when ESG principles are applied at the regional level?
Can regions that integrate ESG into public and private decision-making improve the quality of life for their citizens? What is the profit in this case? Are we now referring to well-being goals?
- The European ESG Landscape: More Than Just Reporting
Europe is a global leader in ESG regulation. From the EU Green Deal to the Corporate Sustainability Reporting Directive (CSRD) and the EU Taxonomy for Sustainable Activities, European policies now go far beyond financial reporting – they aim to improve citizens’ well-being.
Examples of ESG-driven transformation:
- Cleaner cities 🌍– targets related to the reduction of carbon emissions, have led to the adoption of measures like low-emission zones (LEZs), directly improving air quality and generally the quality of environmental aspects.
- Fairer jobs 👩🏭– supply chain due diligence laws have made companies to focus on human rights and environmental risks within their supply chains, including child labor, forced labor, deforestation, and unsafe working conditions.
- Resilient infrastructure⚡– ESG-linked funding mechanisms encourage municipalities to prioritize, environmental protection, disaster risk management and renewable energy resources, resulting in holistic approaches when designing.
Europe’s ESG journey is not just a bureaucratic exercise – it’s about aligning business success with human and environmental well-being.
- Regional Well-Being as the New Measure of Success
Well-being today is considered one of the strongest indicators of life satisfaction, combining physical health, economic security, environmental quality, and social connection.
In that sense, ESG becomes a pathway toward holistic progress – balancing sustainability, resilience, and social equity.
European regions are now redefining success: instead of chasing short-term growth, they measure development through long-term well-being outcomes. This is where ESG truly delivers – by creating conditions for sustainable prosperity.
- European Regions and ESG Implementation
Regional ESG implementation is driven by mechanisms such as the European Green Deal, Sustainable Finance Disclosure Regulation (SFDR), and Cohesion Policy Funds.
These frameworks:
- Support sustainable investments and corporate transparency
- Help municipalities design green infrastructure and community programs
- Strengthen the link between environmental progress and citizen well-being
In essence, ESG acts as both a policy tool and a cultural shift.
- ESG Inequalities Across Europe
ESG’s benefits follow the same inequality pattern like GDP and well-being across different regions. This means that not every region experiences the benefits of ESG policies equally. Some challenges include:
- Unequal implementation⚖️– Institutions adopt ESG policies in different ways. Of course, the method and degree of implementation of ESG policies, differ between small and large institutions, public and private. This results in cases where there are entrepreneurially developed regions, greater steps appear in the field, in contrast to smaller or less dynamic regions in which either few or traditional organizations with minimum capacity for change are active.
- Skepticism 🤔– In many cases, implementation of ESG policies is hindered by suspicion due to the lack of information about the relevant benefits that the ESG policies can offer.
- Transition barriers 🏭– There are many cases of regions where traditional business models dominate. For example, industries that rely on non-renewable energy sources. These cases are difficult to be changed, which leads to change difficulties, regarding the integration of ESG policies.
These disparities show that ESG success cannot rely on regulation alone – it requires local adaptation, cooperation, and education.
- What Does This Means for Policymakers, Companies, and Citizens?
- For policymakers: They must incorporate into their policies, indicators that link the implementation of ESG practices to the well-being of citizens. That is, to measure the degree to which a policy can improve the daily life of citizens in pillars related to environment, society, economy.
- For companies: Companies should adapt their strategy to the needs of local communities and prioritize ESG dimensions that require the most improvement.
- For citizens: Individuals play a dual role. They need to be informed about ESG practices and support organizations that implement such practices. At the same time, they need to collaborate with policymakers, to provide feedback when implementing policies.
ESG becomes a powerful tool for improving regional well-being.
ESG is more than an investment checklist – it’s Europe’s pathway to resilient, equitable, and thriving regions.
The real question is not why ESG, but how we ensure it benefits everyone, from the largest cities to the smallest rural communities?
What changes are you seeing in your region thanks to ESG policies?
Share your insights with us.
Mr. Charalampos Samantzis
Mr. Charalampos Samantzis is the European Commission’s authorized evaluator expert. He is currently employed as Managing Director of the Center for European Projects of the University of Thessaly as EU project manager and coordinator of different EU initiatives.
