Research On The Impact Of ESG On Financial Performance Of Power Companies

In order to respond to the national "double carbon " policy and promote the sustainable development concept,it is of great significance to build an ESG evaluation system in line with the characteristics of the power industry and explore the relationship between ESG performance and financial performance of domestic listed power companies.Under the environment of high-quality development in the new era,electric power enterprises should take ESG as an entry point,take new development ideas as a part of themselves,and effectively apply the ESG system to every business activity of the company.In this process,actively and orderly promote the investment of capital and the opening of the market,so that all aspects of the industrial chain can play a greater role in this process,so that the whole industry can play a greater role in this process.Firstly,through the relevant literature research on the correlation between ESG and financial performance at home and abroad,this paper finds that there are three main viewpoints on the impact of ESG on financial performance:ESG has a positive impact on corporate financial performance,ESG has a negative impact on corporate financial performance,and ESG has a nonlinear impact on corporate financial performance.Secondly,by summarizing and analyzing the relevant literature on the construction of ESG evaluation system and enterprise financial performance evaluation system,the ESG evaluation system in line with the characteristics of the power industry and the financial performance scoring method that can comprehensively reflect the financial performance of enterprises are discussed.Then,the financial data and social responsibility reports of 20 large domestic listed power companies from 2012 to 2021 are taken as the research objects,and ESG scores and financial performance scores are performed.In addition,there are two views on the definition of financial performance.One is to select comprehensive indicators to represent corporate financial performance,and the other is to select single financial indicators to represent corporate financial performance.Therefore,in the consideration of robustness,this paper analyzes the correlation between the ESG score results and the company’s comprehensive financial performance and the single index financial performance index representing the company ’s profitability after controlling the variables,and analyzes the correlation between the current period,the previous period and the previous two periods respectively.The analysis results show that the ESG performance of listed power companies is significantly correlated with their comprehensive financial performance and single-index financial performance,and the current ESG,the previous ESG and the previous two ESG have a significant negative correlation with the single-index financial performance of listed power companies,while the current ESG and the previous ESG have a significant negative correlation with the comprehensive financial performance of listed power companies,that is,the current ESG,the previous ESG and the previous ESG have a negative promotion effect on the single-index financial performance of enterprises,and the current ESG and the previous ESG have a negative promotion effect on the comprehensive financial performance of enterprises.Finally,this paper also verifies that there is a time lag in the impact of ESG on corporate financial performance.The research results have certain warning significance for enterprise managers.They should make reasonable investment in ESG according to their own operating conditions,and make appropriate investment in ESG without increasing their operating pressure,so as to minimize the impact on current economic efficiency.