ESG Performance,Entity Credit Rating And Sustainable Development Of Enterprises

During the 29 th collective study of the Political Bureau of the Central Committee of the Communist Party of China,General Secretary Xi Jinping emphasized that my country must continue to strengthen the construction of ecological civilization and adhere to the strategy of sustainable development.Enterprises,as micro subjects in the country’s economic development,bear the heavy responsibility of taking the road to sustainable development.However,it is common for listed companies in China to suffer from poor corporate governance and a lack of attention to environmental issues,causing companies,investors and other stakeholders to suffer heavy losses.This requires companies to enhance their awareness of environmental protection and green development,and to disclose the current state of their operations to stakeholders in a timely manner.Therefore,there is also a need to establish an objective and fair information disclosure system to facilitate investors to have a more comprehensive understanding of the current status of corporate development.Currently,credit ratings are an important way to alleviate information asymmetry in financial markets and influence investors’ investment decisions.And good corporate credit is conducive to helping enterprises reduce their financing constraints,providing an opportunity to further enhance corporate governance and environmental risk response capabilities,and promoting sustainable corporate development.However,with the introduction of the concept of green development,ESG,as a key factor to measure the sustainable development of enterprises,integrates the performance of enterprises in the three dimensions of environment,society and corporate governance,which makes up for the deficiency of corporate credit rating in non-financial indicators.Therefore,this paper intends to combine the two perspectives of ESG performance and corporate credit rating,and explore the sustainability of enterprises from the economic,social,environmental and corporate governance dimensions by measuring the performance of enterprises in the relevant aspects under the two different perspectives.The following conclusions were drawn from the empirical analysis:(1)When the correlation between ESG performance and sustainable development and corporate credit rating and sustainable development was studied,ESG performance and corporate credit rating were both significantly and positively correlated with sustainable development.When ESG performance,corporate credit rating and sustainability are studied together,ESG performance is significantly negatively related to sustainability and corporate credit rating is significantly positively related to sustainability.(2)The differences show that the positive relationship between ESG performance and sustainable development is more pronounced for large enterprises than for small and micro enterprises,while the negative impact of corporate credit rating on sustainable development is more pronounced for state-owned enterprises and large enterprises.(3)There is a double threshold effect on the impact of corporate credit rating on sustainable development.It can be seen that the regression coefficient of corporate credit rating on sustainable development turns from positive to negative as ESG performance increases,indicating that when optimising the corporate credit rating system,the introduction of green indicators of ESG performance helps to improve the sustainability of enterprises.However,the excessive pursuit of higher ESG performance will have a negative impact on the basic production and operation of enterprises,which will be detrimental to their sustainable development.The significance of this paper is that:(1)from the perspective of corporate evaluation,the relationship between corporate performance in ESG and credit rating is analysed from different dimensions and the research perspective on sustainable development is broadened.(2)Empirically analyse the impact of corporate credit ratings on sustainable development in the context of changes in ESG performance,which helps companies and investors to make more efficient use of corporate information disclosure.(3)Based on the empirical results,we propose recommendations for improving corporate governance and regulatory mechanisms,which will help to promote the improvement and perfection of corporate credit ratings and facilitate the ESG process and sustainable development.