How ESG Performance Affects Corporate Value

The Fifth Plenary Session of the 18 th CPC Central Committee put forward the five major development concepts of "innovation,coordination,green,openness and sharing",which set the keynote of China’s green development transformation in the 13 th Five-Year Plan.At the United Nations General Assembly in September 2020,President Xi Jinping solemnly pledged that China will "reach peak carbon by 2030 and achieve carbon neutrality by 2060".In the context of green finance becoming an important tool to help the country achieve the double carbon goal and promote sustainable development,ESG investment has gradually become the focus of attention from all walks of life.As the main body of ESG management practice,the key to the long-term proactive ESG management practice of enterprises lies in the win-win situation of taking social responsibility and improving corporate value.Therefore,the study of "whether and how ESG performance can affect corporate value" has both theoretical value and important practical significance.In order to clarify the impact of ESG performance on enterprise value,this paper selects annual data of Ashare manufacturing listed companies from 2011-2021,and empirically tests the core research question of whether and how ESG performance affects enterprise value from two perspectives: intrinsic value and market valuation,using stakeholder theory,resource dependence theory,competitive strategy theory and information asymmetry theory as the theoretical basis,and obtains the following conclusions:(1)There is a positive correlation between ESG performance and enterprise value,and good ESG performance has a positive effect on enterprise value.(2)ESG performance affects enterprise value through two channels:intrinsic value and market valuation,which can increase revenue and reduce expenditure,improve efficiency,reduce risk,with attracting investors’ attention.(3)The improvement of ESG performance of state-owned enterprises,light polluters and large-scale enterprises leads to the improvement of enterprise value more significantly than that of private enterprises,heavy polluters,and small-scale enterprises.According to the findings of this paper,the following insights can be obtained:(1)For enterprises,they should actively participate in ESG management practices and disclose ESG information publicly.(2)For investors,they should incorporate ESG performance into investment decision considerations and screen investment targets through ESG performance screening.(3)From the perspective of the government,it should build an ESG investment policy and legal system in line with Chinese characteristics and strengthen the supervision of ESG information disclosure and rating,and promote the healthy development of ESG investment in China.