Study On The Impact Of ESG Ratings On Financial Risk In The Industrial Sector

Guiding enterprises to green development and achieving harmony between economic development and environmental protection is a common concern of academia and industry at present.The resulting ESG concept has become a hot topic in the economic field.ESG concept is a corporate evaluation system that focuses on environmental,social,and corporate governance performance rather than financial performance,which comprehensively and objectively reflects the sustainable development capability and growth potential of enterprises,and to a certain extent makes up for the lack of traditional financial information.Most traditional industrial enterprises are high energy-consuming and high-polluting enterprises,and incorporating ESG into the risk management of industrial enterprises plays a key role in achieving green and sustainable development of industrial enterprises.This paper takes industrial listed enterprises in Shanghai and Shenzhen A-shares in China from 2015-2021 as the research sample,selects the CSI ESG rating index as a measure of ESG performance,adopts the Z-Score model to estimate corporate financial risk,and selects several control variables to investigate the impact of ESG rating on financial risk of industrial enterprises through panel regression,and explores the path of corporate information transparency on both.The results of the empirical study find that:(1)ESG rating is necessary for industrial enterprises because ESG rating helps to reduce the financial risk of industrial enterprises.(2)Corporate information transparency plays an important mediating role in the effect of ESG ratings on the financial risk of industrial firms.ESG ratings have a positive effect on corporate information transparency,and corporate information transparency has a negative effect on corporate financial risk.(3)The lagged period of ESG rating is significantly and positively correlated with the financial risk of industrial enterprises,and the correlation coefficient is higher than that of the current period of ESG rating on the financial risk of industrial enterprises,and ESG rating is an important indicator to warn the financial risk of enterprises.(4)Compared with large-scale industrial enterprises,ESG ratings have a greater impact on the financial risk of small and medium-sized industrial enterprises;compared with industrial enterprises in the central and western regions,ESG ratings have a more significant impact on the financial risk of industrial enterprises in the eastern region.