Publication Details
Abstract
Sustainable agricultural development in arid and transitional economies requires investment evaluation methods that reflect not only direct financial profit, but also ecological resilience, social responsibility, and long-term preservation of natural capital. In the Syrdarya region of Uzbekistan, especially in Boyovut district, traditional irrigation practices increase water consumption, intensify secondary soil salinization, and create hidden costs that are not captured by conventional indicators such as ROI, NPV, and IRR. This study develops and applies an integrated economic-mathematical model for assessing agricultural investment efficiency through ESG transformation. The proposed model, ROI_ESG = ROI_trad × (1 + I_ESG), incorporates a weighted composite ESG index consisting of environmental efficiency, social responsibility, and corporate governance sub-indices. Given the ecological vulnerability of the region, the environmental component is assigned the highest weight. The model is empirically tested using comparative data from two investment alternatives: a traditional furrow irrigation project and a smart green drip irrigation project implemented on equal land areas during the 2025–2026 production cycle. The results show that although the traditional project demonstrates a higher conventional ROI of 22.0% compared with 18.0% for the green project, the ESG-adjusted calculation reverses this conclusion. After integrating environmental and social externalities, the green project achieves a transformed return of 32.4%, while the traditional project reaches only 25.3%. Sensitivity analysis further confirms that green modernization remains more resilient under water scarcity and salinization stress. The findings demonstrate that ESG-based investment modeling can support sustainable capital allocation, improve agricultural policy design, and strengthen expanded reproduction processes in climate-risk regions.