Causal Relationship Between ESG Assessment Criteria and SDGs for PPP Projects: A Fuzzy Cognitive Approach

ABSTRACT Environmental, Social and Governance (ESG) assessment criteria have received substantial recognition for investment decision and practical steps to achieving the sustainable development goals (SDGs). Given the global reliance on public‐private partnership (PPP) to bridge infrastructure deficit, investment into these projects is on the rise; it is necessary that ESG criteria and their measured impact on SDGs be investigated. This study attempts to address the lack of understanding of the roles of ESG criteria in the attainment of SDGs. This study has modeled the cause‐and‐effect relationships of ESG criteria of PPPs and SDG attainment. A semi‐quantitative fuzzy cognitive map (FCM) model using 155 PPP expert mappings is created to describe the dynamic nature between these concepts. Findings showed that environmental assessment criteria are related to seven SDGs, the social assessment criteria are related to 10 SDGs, and governance assessment criteria constitute five SDGs. The results of the scenario design hypothesize that how the project improves quality of life positively increases SDG 3. Also, the backward scenario analysis revealed that effective planning and risk assessment policies of the project cause an increase in SDG 11 attainment. The main contribution of this study is the application of FCM to describe the interactions between PPPs ESG criteria and SDGs provided insights offer theoretical and practical pathways into the integration of specific ESG criteria for investment decision‐making and a sustainable and equitable future.