Greening through ESG: Do ESG ratings improve corporate environmental performance in China?

IF 4.8 2区经济学 Q1 BUSINESS, FINANCE

International Review of Economics & Finance Pub Date : 2024-11-01 DOI:10.1016/j.iref.2024.103726

Hua Zhang, Jie Lai

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引用次数: 0

Abstract

Environmental, social, and governance (ESG) ratings matter for corporate green development as they can shape companies' sustainable efforts. However, the influence of third-party ESG ratings as an emerging informal environmental regulation on corporate environmental performance (CEP) remains understudied in China. To identify this causality, we exploit the exogenous variation of SynTao Green Finance's ESG ratings and conduct a difference-in-differences (DID) estimation. Utilizing panel data of Chinese A-share listed companies from 2008 to 2023, we find that ESG ratings can induce improvements in CEP, along with increased positive environmental scores and decreased negative environmental scores. We document three feasible mechanisms for this CEP impact: alleviated financial constraints, heightened media attention, and enhanced green innovation. We further investigate the heterogeneous effects and find that ESG ratings significantly improve CEP for companies with high executive shareholding and more female directors, companies in low-competitive industries, and those located in cities with high levels of economic development. Our findings contribute to existing studies on the determinants of CEP and offer novel evidence of the efficacy of ESG ratings as an informal institution in promoting corporate green development.

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通过 ESG 实现绿色：ESG 评级能否改善中国企业的环境绩效？

环境、社会和治理（ESG）评级对企业绿色发展至关重要，因为它们可以影响企业的可持续发展努力。然而，在中国，第三方环境、社会和治理评级作为一种新兴的非正式环境监管手段，对企业环境绩效（CEP）的影响仍未得到充分研究。为了确定这种因果关系，我们利用 SynTao Green Finance ESG 评级的外生变量，进行了差分估计。利用 2008 年至 2023 年中国 A 股上市公司的面板数据，我们发现 ESG 评级可以促进 CEP 的改善，同时提高正面环境得分，降低负面环境得分。我们记录了 CEP 影响的三个可行机制：减轻财务约束、提高媒体关注度和加强绿色创新。我们进一步研究了异质性效应，发现对于高管持股和女性董事较多的公司、低竞争力行业的公司以及位于经济发展水平较高城市的公司来说，ESG 评级能显著提高 CEP。我们的研究结果为现有的关于 CEP 决定因素的研究做出了贡献，并提供了新的证据，证明 ESG 评级作为一种非正式制度在促进企业绿色发展方面的功效。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

International Review of Economics & Finance Multiple-

CiteScore

7.30

自引率

2.20%

发文量

253

期刊介绍： The International Review of Economics & Finance (IREF) is a scholarly journal devoted to the publication of high quality theoretical and empirical articles in all areas of international economics, macroeconomics and financial economics. Contributions that facilitate the communications between the real and the financial sectors of the economy are of particular interest.