Advancing the Sustainable Development Goals in E7 Economies: The Role of ECON ‐ ESG Governance in Mitigating the Environmental Effects of Urbanization

ABSTRACT Rapid urbanization, industrialization, and rising energy demand intensify environmental pressures in E7 economies and complicate progress toward key Sustainable Development Goals. This study examines the effects of urbanization, energy transition, trade openness, technological development, and Environmental, Social, Governance, and Economic Sustainability (ECON‐ESG) performance on greenhouse gas emissions in E7 countries over 2000–2023, while also assessing the moderating role of ECON‐ESG in the urbanization–environment relationship through the URB × ECON‐ESG interaction. Panel‐corrected standard errors (PCSE) are employed as the main estimator, fully modified ordinary least squares (FMOLS) are used for robustness analysis, and wavelet coherence captures time‐ and frequency‐varying ECON‐ESG–GHG dynamics. The results show that urbanization, trade openness, and technological development are associated with higher GHG emissions, whereas stronger ECON‐ESG performance is associated with lower emissions. The energy‐transition effect is sensitive to model specification and estimator choice, indicating that its environmental contribution is not uniform across specifications. The interaction term is negative, providing evidence that stronger ECON‐ESG performance can attenuate the adverse environmental effect of urbanization, while wavelet results reveal heterogeneous but generally stronger inverse ECON‐ESG–GHG co‐movement over medium‐ and long‐run horizons. By combining a multidimensional ECON‐ESG framework with total GHG emissions and an urbanization moderation perspective, the study offers policy implications for sustainable urban planning, environmentally oriented innovation, cleaner trade structures, effective energy transition, and integrated sustainability governance in emerging economies.