Study on the impact of ESG performance on firm performance

Abstract

In order to accelerate the achievement of the carbon peaking and carbon neutrality goals and to comply with the trend that China’s economic development is increasingly focused on quality, it is significant for enterprises to achieve sustainable development. Using a panel model, this paper empirically analyzes the relationship between firm performance and its ESG performance using listed companies in the Shanghai and Shenzhen A-share markets from 2012-2021 as a research sample, and discusses the differences according to the industries which the companies are in. The analysis results show that enterprise ESG performance has a significant positive impact on its firm performance, and the better the ESG performance of a company, the higher the firm performance. The heterogeneity analysis reveals that this significant positive relationship only exists in manufacturing firms, but not in non-manufacturing firms.