ESG Transformation of the Real Sector: An Empirical Analysis of ESG Agenda Drivers in Companies in the Caucasus and Central Asia (CCA) Region

ESG transformation of industrial companies is a key factor for business success and positive social change. At the same time, the implementation of ESG standards in the Caucasus and Central Asia (CCA) region is still in its formative stage. The aim of this study is to examine the factors that contribute to the expansion of ESG practices within enterprises in the real sector of the economy. This study surveyed 692 companies from Russia and Kazakhstan across five key industries using an online questionnaire with 14 statements assessing ESG engagement on a 5-point scale. The collected data underwent factor analysis (principal component method with varimax rotation) and ridge regression modeling to identify key drivers of corporate commitment to ESG practices. The results show that despite growing geopolitical tensions, interest in implementing ESG practices not only persists but is increasing in importance. Our analysis indicates that increased regulatory pressure from governments and international organizations is the main driver of ESG transformation for Russian and Kazakhstani companies across all studied industries. Additionally, enhanced investment attractiveness and access to international funding markets are significant factors shaping corporate commitment to the ESG agenda in most sectors.