Environmental, Social, and Governance Performance and Corporate Sustainable Development in China

Abstract

Purpose - With the acceleration of global integration and the deepening of the market economy, sustainable development is receiving unprecedented attention worldwide. Corporate environmental, social, and governance (ESG) performance is one of the most important ways of promoting sustainable development. Companies with good ESG performance excel both operationally and financially, maintaining their competitive advantage and achieving sustainable corporate growth. This study examines the impact of ESG performance on corporate sustainability and identifies factors that influence this relationship from the perspective of external governance structures. Design/Methodology/Approach - This study investigates the impact of corporate ESG performance on corporate sustainability using a fixed-effects model with Chinese A-share listed companies from 2011 to 2020. It also explores the moderating roles of external audit quality, the shareholding ratio of institutional investors, and analyst attention on the impact of ESG performance on corporate sustainability. Findings - The findings show that corporate ESG performance can contribute to sustainable development. External audit quality, the shareholding ratio of institutional investors, and analyst attention have positive moderating effects on ESG performance, which can contribute to sustainable development. Research Implications - This study enriches theoretical research in ESG performance and sustainability, and identifies external governance factors that contribute to the relationship between the two. Consequently, it provides suggestions for listed company growth and sustainability practices