The Impact of the ECON–ESG Framework on Earnings Sustainability: Empirical Evidence from Southeast Asian Countries

Abstract

Amidst macroeconomic volatility and the increasing demands for sustainable development in Southeast Asian economies, this study analyzes the combined impact of economic conditions and ESG performance on corporate earnings sustainability. Utilizing a panel dataset of listed non-financial firms across 11 Southeast Asian countries from 2018 to 2024, the research employs Principal Component Analysis (PCA) to construct economic factors and the ECON– ESG index. These are subsequently tested using panel regression models. The findings reveal that both macroeconomic factors and ESG performance exert a statistically significant positive impact on earnings sustainability. Notably, the integrated ECON–ESG model demonstrates the highest explanatory power, suggesting a critical need to align macroeconomic stability with ESG-oriented policies.