Research On The Impact Of ESG Information Disclosure On Enterprise Capital Cost In Power Industry

With the increasing popularity of the concept of global sustainable development,more and more people are paying attention to the balance and coordination of environmental,social,and economic aspects.This transformation has spread from individual behavior to the level of enterprises and governments.It is gradually promoting the transformation of various industries towards sustainable development.Nowadays,the integration of economic development and environmental protection has become a trend.In 2004,the United Nations first proposed the concept of ESG(Environmental,Social,and Corporate Governance).In recent years,the concept of ESG has gradually become a hot topic in the capital market,and China’s ESG investment has also experienced rapid development and continuous expansion in scale.The research aims to explore the relationship between ESG information disclosure and capital costs of listed companies in the power industry.Using data from A-share power industry listed companies in China from 2016 to 2018 and the ESG rating results of China Securities,an empirical study was conducted using a time individual fixed effects model.The research results indicate that the ESG information disclosure behavior and quality of ESG information disclosure of listed companies in the power industry have a significant impact on the cost of capital.In addition,operational risk plays a mediating role between the quality of ESG information disclosure and the cost of capital.The specific research conclusions are as follows:Firstly,the ESG information disclosure behavior of listed companies in the power industry helps to reduce capital costs.Secondly,the higher the quality of ESG information disclosure by listed companies in the power industry,the lower the cost of capital.Third,the operational risk has a mesomeric effect between the quality of ESG information disclosure and the cost of capital of listed companies in the power industry.Listed companies in the power industry can reduce the operational risk of enterprises by improving the quality of ESG information disclosure,thus reducing the cost of capital.Fourthly,from the perspective of ownership nature,for non-state-owned listed companies in the power industry,the quality of ESG information disclosure has a greater impact on reducing capital costs than state-owned listed companies in the power industry.Fifthly,in terms of time,after the mandatory disclosure of ESG information by the China Securities Regulatory Commission in2018,the impact of ESG information disclosure quality on reducing capital costs has further expanded.Based on the above research conclusions,suggestions are proposed for listed companies on how to improve ESG information disclosure and improve the quality of ESG information disclosure.Enterprises can actively disclose ESG information and improve the quality of ESG information disclosure.Private enterprises should focus on the market’s ESG information disclosure needs.The government can establish and improve an ESG information disclosure system,encourage institutions to conduct ESG ratings,and enhance the enthusiasm of enterprises for ESG information disclosure.