Research On The Market Reaction Of Huifeng Shares To Negative Events Based On The ESG Framework

Our economic development has now entered a new era and has begun to transition from a period of high growth to a period of high-quality development.High-quality development is an inevitable requirement for maintaining healthy and sustainable economic development,and is also an inevitable requirement for economic and social development proposed by China in the14 th Five-Year Plan period.Environmental,Social and Govermance（ESG）is an important way for outsiders to obtain information on environmental protection,social responsibility and corporate governance.Compared with the international market,the development and promotion of ESG concept in China started late.Although our country’s regulators have paid more and more attention to the ESG information disclosure of listed companies in recent years,when companies are exposed to ESG scandals,the market will react differently.There are still large differences in the degree of response to different types of events,and there is currently little literature on the degree of market response to different types of negative events for the same company.Based on this background,this paper takes Huifeng shares,which have experienced many negative events in recent years,as the research object.Based on the ESG framework,the FamaFrench three-factor model（hereinafter referred to as the three-factor model）is used to study the market reaction of case companies when different types of negative events occur,in order to provide decision support from a case perspective for the optimization and reform of the ESG framework of listed companies in our country and the ESG management of listed companies themselves.Firstly,this paper expounds the research background and clarifies the research significance;Secondly,this paper compares the existing literature in terms of ESG information disclosure and market reactions to different types of negative events,and elaborates the relevant theories to lay the theoretical foundation for the case study below;again,this paper uses a three-factor model to analyze the market reactions to environmental pollution events,social responsibility events and corporate governance events of the case companies,and subsequently explores the causes of the differences in market reactions based on three aspects: the strength of ESG construction of companies,the strength of government regulation and discipline,and the degree of investors’ attention.After the study,it was found that the three negative incidents were punitive to the case companies,and the degree from high to low was: corporate governance incidents,social responsibility incidents,and environmental pollution incidents.There are differences,and there is an order in the degree of investor attention.Finally,this paper puts forward optimization suggestions in a targeted manner,providing a reference for Huifeng to improve the ESG information disclosure framework and achieve high-quality sustainable development.It also hopes to help relevant government departments to improve supporting policies and investors to increase their attention to ESG.Cooperation to jointly achieve highquality economic and social development.