How the gauge is calibrated

Methodology

The ESG Barometer combines structural equation modeling, principal component analysis, machine learning, and Net Promoter Scoring to trace how climate policy awareness becomes practice.

Research objectives

  1. Identify drivers

    Determine what drives sustainability practices among Egyptian organizations.

  2. Trace policy awareness

    Assess how climate policy knowledge shapes sustainability priorities in the Egyptian context.

  3. Connect goals to strategy

    Analyze the relationship between sustainability goals and strategic implementation.

  4. Evaluate reporting maturity

    Assess how developed sustainability reporting practices are across the sample.

  5. Surface local barriers

    Identify Egypt-specific barriers and challenges to sustainability implementation.

  6. Translate into guidance

    Produce recommendations tailored to Egyptian policy and business contexts.

Methods

Structural Equation Modeling

Tests hypothesized pathways between Paris Agreement awareness and sustainability priorities, goals, impact, strategy, and reporting, producing standardized path coefficients and significance levels.

Principal Component Analysis

Reduces the survey's sustainability variables to their underlying dimensions — identifying PC1 (integration) and PC4 (implementation) as the components most predictive of impact.

Machine Learning

Random Forest and XGBoost models test how well PC1 and PC4 predict Sustainability Impact out of sample, reported as R² on held-out test data.

Net Promoter Scoring

Converts 0–10 ratings of sustainability's impact and risk into a single comparable score per construct.

Reading the coefficients

β (standardized path coefficient)
Direction and strength of a relationship between two constructs. Larger magnitude means a stronger relationship; sign indicates direction.
f² (Cohen's effect size)
Size of a predictor's contribution to a model, independent of sample size. Conventional benchmarks: 0.02 small, 0.15 medium, 0.35 large.
t-value
Statistical significance indicator. Values above 1.96 indicate significance at p < 0.05.
R² (variance explained)
The proportion of variation in an outcome accounted for by the model — for example, R² = 0.584 for Business Model integration.

How the NPS scores are built

NPS = % Promoters − % Detractors

GroupRating
Promoters9–10
Passives7–8
Detractors0–6

Applied separately to perceptions of sustainability's impact and sustainability's risk, this produces the two scores behind the Barometer's signature gauge: +24.14 and −86.21.

Why the Paris Agreement is the reference point

The Paris Agreement is the international climate treaty adopted by 196 parties at COP21 in Paris on December 12, 2015, and in force since November 4, 2016. Its core aim is to keep the rise in global average temperature well under 2°C above pre-industrial levels, with efforts to hold it closer to 1.5°C.

For Egypt specifically, the Agreement carries added weight: the country is highly exposed to climate impacts such as Nile Delta flooding and agricultural disruption, hosted COP27 in 2022, and has tied its Vision 2030 economic plan to sustainable development goals. International investment and development funding increasingly expect Paris Agreement alignment as a baseline.