As the global sustainability debate gathers momentum, much of the discussion centers on the priorities of advanced economies: net-zero targets, environmental, social and governance (ESG) disclosure standards, and carbon pricing mechanisms. Yet for emerging markets, including many in Asia, Africa and Latin America, the challenge is more complex.

Climate change is no longer an abstract phenomenon. Heatwaves across South Asia, flooding in Southeast Asia, and water stress in major cities highlight the urgency of environmental action. At the same time, developing economies must continue expanding infrastructure, creating jobs, strengthening industrial capacity and raising living standards. For these countries, sustainability cannot come at the expense of development.

The key question is not whether to prioritize growth or the environment — but how to integrate the two. This perspective lies at the heart of the D-ESG Framework developed at Cornell University's Emerging Markets Institute. By adding a "D" for development to the traditional ESG model, the framework reflects a reality that policymakers across the Global South understand well: economic capacity is the foundation for sustainable transformation.

In high-income countries, environmental policies often compete with marginal GDP gains. But in developing and emerging economies, the "E" in ESG frequently competes with basic needs: reliable electricity, transport infrastructure, affordable housing and industrial upgrading.

China's development trajectory offers a compelling example. Over four decades, rapid economic growth lifted more than 800 million people out of poverty and built world-class infrastructure — from the world's largest high-speed rail network to advanced manufacturing ecosystems. This economic transformation created the fiscal resources, technological base, and institutional capacity necessary for today's large-scale green transition.

China now accounts for more than 50 percent of global installed solar capacity and roughly 40 percent of global wind power capacity, making it the world's largest renewable energy market. In 2023 alone, China added more solar capacity than the rest of the world combined. These achievements reflect sustained industrial policy, innovation investment, and large-scale deployment capability.

Similarly, China has become the global leader in electric vehicles. In 2023, Chinese manufacturers accounted for over 60 percent of global EV production, supported by integrated supply chains, battery technology leadership, and expanding domestic demand. The EV sector illustrates how environmental goals and industrial competitiveness can reinforce each other.

Green finance has also scaled rapidly. China is home to one of the world's largest green bond markets, with cumulative issuance exceeding $300 billion. Financial innovation has played an essential role in channeling capital toward renewable energy, energy efficiency and low-carbon infrastructure.

These advances were not possible before a strong economic and industrial base had been established. Development made sustainability scalable.

Many global ESG standards were developed using advanced economies as benchmarks. When applied to emerging markets, this approach can generate misleading conclusions. First, the starting conditions are different. Countries undergoing industrialization naturally have rising energy demand during certain phases of development. Evaluating them solely on absolute emission levels without considering structural transformation risks oversimplification.

Second, static rankings fail to capture progress. China's carbon intensity — carbon emissions per unit of GDP — has declined by more than 50 percent compared with 2005 levels, reflecting improvements in energy efficiency and industrial upgrading. Measuring sustainability only in current absolute terms overlooks such structural shifts.

If sustainability frameworks do not recognize trajectory, they may discourage the long-term investments required for transition. The D-ESG framework proposes three adjustments particularly relevant for emerging economies.

First, the benchmarking should be among comparable economies. Instead of comparing emerging markets directly to advanced economies, countries should be evaluated within a peer group of major emerging economies, creating context-sensitive assessment.

Second, development indicators should be integrated into the evaluation. The model assigns 30 percent weight to development — including GDP performance, trade dynamism, innovation, and fiscal balance — and 70 percent to ESG factors combined. This recognizes that economic vitality influences a country's ability to finance green technology, strengthen social inclusion, and improve institutional governance.

Third, there should be recognition of progress over time. The framework incorporates a 10-year improvement measure alongside current performance, thus rewarding reform momentum and structural upgrading.

This approach aligns closely with China's emphasis on high-quality development — integrating innovation, green growth, and shared prosperity. As emerging markets account for an increasing share of global growth, emissions and innovation, their development strategies will shape the future of the global climate agenda.

For many developing economies, the green transition must be framed as an opportunity for industrial upgrading, technological leadership and energy security — not merely compliance with external standards. China's experience suggests that economic modernization and environmental ambition can advance together. Renewable energy leadership, EV expansion, digital infrastructure, and green finance demonstrate how growth and sustainability can become mutually reinforcing drivers.

The global sustainability conversation therefore requires a more balanced narrative. Rather than presenting growth and environment as opposing forces, policymakers should focus on development pathways that reduce emissions while expanding opportunity. Embedding development into sustainability metrics does not weaken climate ambition. Rather, it strengthens it by making it realistic, inclusive and more aligned with structural transformation.

For emerging markets — including China — the future lies not in choosing between growth and green, but in advancing both together. A sustainability framework that reflects development realities is essential to ensuring that the global transition is not only environmentally sound, but also economically just and globally shared.

Lourdes Casanova is a senior lecturer and director of the Emerging Markets Institute at Cornell SC Johnson College of Business, Cornell University; and Anne Miroux is a faculty fellow at the same institute.

The views don't necessarily reflect those of China Daily.

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