Download pdf
Performance of Corporate Sustainability Based on ESG Perspective
- 1 Changan University
* Author to whom correspondence should be addressed.
Abstract
Environmental, social and governance (ESG) investing suggests that a company’s financial investments should not only consider economic returns and financial indicators, but also assess the combined environmental, social and wider stakeholder impacts of corporate activities and investment behaviour. Enhancing corporate value is one of the ultimate goals of ESG practice. The purpose of this paper is to examine whether there are sectoral differences in ESG practices across industries and to explore the relationship between corporate sustainability and ESG investments. Three representative ESG rating agencies’ ratings of China's domestic listed enterprises from 2017-2021 were collected, and the top 5% of enterprises (eight in total) were selected as a comprehensive sample to assess their sustainability, and the following conclusions were drawn: (1) there are sectoral differences in ESG investment, with higher ESG ratings in frontier sectors; (2) there is a lag, and there is no short-term correlation between ESG investment and corporate sustainability.
Keywords
ESG ratings, sustainable development, listed companies, market systems
[1]. Evans J R,Peiris D. The Relationship Between Environmental Social Governance Factors and Stock Returns[J]. Social Science Electronic Publishing, 6 (1) : 13-21. 2010.
[2]. Brogi M, Lagasio V. Environmental,Social,and Governance and Company Profitability: Are Financial Intermediaries Different?[J] Corporate Social Responsibility and Environmental Management, 26 (3): 576-587. 2019.
[3]. Cajias M, Fuerst F, Mcallister P, et al. Do Responsible Real Estate Companies Outperform their Peers?[J] International Journal of Strategic Property Management, 18 (1) : 11-27. 2014.
[4]. El Ghoul S, Guedhami O, Kim Y. Country-level Institutions, Firm Value, and the Role of Corporate Social Responsibility Initiatives[J]. Journal of International Business Studies, 48 (3) : 360-385. 2017.
[5]. Lins K, Servaes H, Tamayo A. Social Capital, Trust, and Firm Performance: The Value of Corporate Social Responsibility During the Financial Crisis[J]. The Journal of Finance, 72 (4) : 1785-1824. 2017.
[6]. Porter M E, Kramer M R. Strategy and Society[J] Harvard Business Review, 84 (12) : 78-91. 2006.
[7]. Friedman M. The Social Responsibility of Business is to Increase its Profits[J]. New York Times Magazine, 13 (33) : 173-178. 2007.
[8]. Garcia A S, Orsato R J. Testing the Institutional Difference Hypothesis: A Study about Environmental, Social, Governance, and Financial Performance[J]. Business Strategy and the Environment, 2020, 29 (8) : 3261-3272.
[9]. Atan R, Alam M M, Said J, et al. The Impacts of Environmental, Social, and Governance Factors on Firm Performance: Panel Study of Malaysian Companies[J]. Management of Environmental Quality, 29 (2) : 182-194. 2018.
[10]. Capelle-Blancard G, Petit A. Every Little Helps? ESG News and Stock Market Reaction[J]. Journal of Business Ethics, 157 (2) : 543-565. 2019.
[11]. Aouadi A, Marsat S. Do ESG Controversies Matter for Firm Value? Evidence from International Data[J]. Journal of Business Ethics, 151 (4) : 1027-1047. 2018.
[12]. Sassen R, Hinze A K, Hardeck I. Impact of ESG Factors on Firm Risk in Europe[J]. Journal of Business Economics, 86 (8) : 867-904. 2016.
[13]. Oikonomou I, Brooks C, Pavelin S. The Impact of Corporate Social Performance on Financial Risk and Utility: A Longitudinal Analysis[J]. Financial Management, 41 (2) : 483-515. 2012.
[14]. Cheng B, Ioannou I, Serafeim G. Corporate Social Responsibility and Access to Finance[J]. Strategic Management Journal, 35 (1) : 1-23. 2014.
[15]. Eliwa Y, Aboud A, Saleh A. ESG Practices and the Cost of Debt: Evidence from EU Countries[J]. Critical Perspectives on Accounting, 102097. 2019.
[16]. Goss A, Roberts G S. The Impact of Corporate Social Responsibility on the Cost of Bank Loans[J]. Journal of Banking & Finance, 35 (7) : 1794-1810. 2011.
[17]. Data source. https://www.chindices.com.
[18]. Data source. https://www.syntaogf.com.
[19]. Data source. https://www.wind.com.cn/portal/en/Home/index.html.
[20]. Jonn Elkington, Cannibals with Forks. The Triple Bottom Line of 21st Century Business[M]. Capstone: Oxford, 1997.
[21]. Chelawat, H., & Trivedi, I. V. The Business Value of ESG Performance: the Indian Context [J]. Asian Journal of Business Ethics, 5(1-2):195–210. 2016.
[22]. Ki-Hoon Lee, Beom Cheol Cin, Eui Young Lee. Environmental Responsibility and Firm Performance: The Application of an Environmental, Social and Governance Model[J]. Business Strategy and the Environment, 25(1):40-53. 2014.
[23]. Sadok El Ghoul, Jurgens, Omrane Guedhami, Chuck C.Y. Kwok, Dev R. Mishra. Does Corporate Social Responsibility Affect the Cost of Capital[J]. Electronic Journal, 35(9):2388-2406. 2011.
Cite this article
Liu,X. (2023). Performance of Corporate Sustainability Based on ESG Perspective. Advances in Economics, Management and Political Sciences,13,82-91.
Data availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
Disclaimer/Publisher's Note
The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of EWA Publishing and/or the editor(s). EWA Publishing and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions or products referred to in the content.
About volume
Volume title: Proceedings of the 2nd International Conference on Business and Policy Studies
© 2024 by the author(s). Licensee EWA Publishing, Oxford, UK. This article is an open access article distributed under the terms and
conditions of the Creative Commons Attribution (CC BY) license. Authors who
publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons
Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this
series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published
version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial
publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and
during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See
Open access policy for details).