The Research On The Motivation And Economic Consequences Of ESG Disclosure

With the increasing attention paid to ESG information disclosure by domestic and foreign capital markets,ESG information plays a more and more important role in reflecting the sustainable development ability and long-term value creation of enterprises.Since the release of the "environmental,social and governance reporting guidelines" by the Hong Kong Stock Exchange in 2012,ESG disclosure has started to develop rapidly in China’s capital market,but as far as the status quo is concerned,the influence of ESG system in China’s capital market is still insufficient,such as ESG information disclosure can not fully meet the needs of stakeholders,and ESG rating and index is in the initial stage of development,whether enterprises,markets or regulatory attention to ESG system are not up to the desired level.Therefore,in order to further promote the application of ESG system in China’s capital market,this paper,on the basis of collecting and sorting out the relevant literature on ESG disclosure and the development of ESG disclosure at home and abroad,combining signal transmission theory,legitimacy theory,institutional theory and stakeholder theory,this paper analyzes the motivation and economic consequences of ESG disclosure,and uses A + H listed company Geely as a case company,then,according to the market model,residual income(GLS)model,Tobin-q and financing plan model and other quantitative tools,we explore the market reaction and capital cost of Geely after ESG disclosure,finally,according to the actual analysis results,some suggestions on the establishment of ESG system are put forward,which provides case support for the theoretical framework of ESG disclosure,it also provides a practical basis for the further improvement of domestic ESG system.The results show that:First,after the first ESG disclosure by Geely,the market reacted positively to the event,which indicates that the ESG disclosure can convey good information to the market;The cost of debt and the cost of equity have both decreased,which shows that ESG disclosure effectively alleviates the financing constraints of enterprises.Third,after the disclosure of ESG by Geely,Tobin-Q gradually increased,excluding the industry influence in the process of comparing with the same industry,the results from the financing plan model show that the external financing has a significant increase in the growth of the corporate performance before and after the disclosure of the ESG,which also validates that Geely reduces the financing cost through the ESG disclosure,that ultimately increased the value of the business.Based on the above conclusions,this paper respectively from the enterprise level,market level and regulatory level put forward the corresponding recommendations.At the level of enterprises,enterprises should reasonably and regularly disclose ESG information according to their strategic objectives;at the level of market,capital market should strengthen ESG investment and development,and improve the compilation of ESG index;at the level of supervision,the construction of ESG system should be accelerated,introducing authoritative third-party oversight.