Research On The Impact Of ESG Performance On Enterprise Value

In recent years,the issue of climate change has become a common challenge for all countries around the world.In order to adapt to and mitigate climate change and achieve sustainable economic development,China has proposed the "double carbon" target in 2020.In this context,the business philosophy and model have changed,and more and more companies are paying attention to ESG.ESG is a corporate evaluation system that balances economic efficiency,environment,social responsibility impact and corporate governance,which is centered on sustainable development values and represents a greener way of development,a more socially responsible corporate image and a better corporate governance mechanism.The value effect of ESG performance is the driving force and decision-making basis for listed companies in China to practice ESG,while the research on the value effect of ESG performance in China is still at the preliminary exploration stage,especially in the role mechanism of ESG playing value still lacks empirical evidence in China’s institutional background and market environment.Therefore,it is necessary to further investigate the relationship between ESG performance and corporate value.The purpose of this paper is to explore the issue of the effect of ESG performance on corporate value and the underlying mechanism.This paper systematically compares relevant domestic and international literature and discusses how ESG performance affects corporate value of China’s listed companies in Shanghai and Shenzhen A-shares between 2015 and 2021 using panel regression models based on sustainable development theory,stakeholder theory and resource dependence theory.Based on the previous literature,debt financing cost and operational risk are introduced as mediating variables to deeply analyze the transmission mechanism of ESG performance on corporate value.Further,this paper examines the moderating effects of analyst attention,media attention and corporate transparency on ESG value effects from the perspective of corporate information environment.In addition,this paper further investigates the relationship based on firm and region heterogeneity,and performs robustness tests for the endogeneity problem using the instrumental variables method and the propensity score matching method.The findings of this paper are as follows: First,the better the ESG performance of China’s listed companies,the higher their enterprise value.Mechanism analysis shows that better ESG performance increases corporate value by reducing debt financing costs and operational risks.Second,the information environment has a moderating effect on the ESG value effect.Specifically,analyst attention and company transparency enhance the value effect of ESG performance,while media attention weakens this effect.Third,there is heterogeneity in the effect of ESG performance on firm value,with ESG performance enhancement having a more positive effect on the value of non-state owned firms,large scale firms,and firms in the eastern region.This paper discusses in detail the relationship between ESG performance and corporate value,and provides empirical evidence to promote sustainable corporate development through ESG evaluation system,which has certain insights for enterprises,investors and government departments.The possible contributions of this study are as follows: First,the established literature focuses on the impact of one aspect of environment,social responsibility,and corporate governance on corporate value,and there are relatively few studies that consider ESG as a whole.This paper provides the latest evidence from China on the value-enhancing effect of overall corporate ESG performance.Second,after clarifying that ESG performance can enhance corporate value,it further clarifies the specific mechanisms and boundary conditions of ESG performance affecting corporate value,and the multi-faceted analysis provides an important complement to the study of the economic consequences of ESG performance.