Towards Sustainable Agri-Food Systems: The Role of Environment, Society, and Governance in Upgrading Export Quality

Abstract

As climate change and food safety incidents rise, global markets demand stricter sustainability and quality standards for agri-food products. Environment, society, and governance (ESG) plays a crucial role in sustainable transformation for agri-food exports. Utilizing matched data from Chinese listed agri-food companies and China Customs, this study reveals a positive impact of ESG performance on upgrading the export product quality within agri-food enterprises. The mechanisms driving this optimization include promoting green technology innovation and establishing brand reputation advantages. However, a detailed examination demonstrates that this positive impact of ESG performance is not absolute. Companies that implement quality competitive strategies, undergo digital transformation, engage in general trade, and export to regions with stringent nontariff barriers rely more on ESG capacities. Lastly, we also consider the international coordination of ESG standards. The findings reveal that firms adopting the Global Reporting Initiative (GRI) framework in ESG disclosure are more likely to achieve quality upgrading through ESG. This highlights the critical importance of maintaining consistency and comparability in ESG standards. Within the United Nations' Sustainable Development Goals and the transition towards sustainable agri-food systems, these findings offer novel insights for establishing green, efficient, and sustainable agri-food systems.