The Impact of ESG Performance on Corporate Value

Abstract

As environmental problems have been increasingly serious, the concept of "sustainable development” has gradually taken hold. ESG, which reflects a company's sustainable development capabilities, has become a trend and attracted widespread attention in the academic community. However, there is still a lack of a unified understanding of the specific association between ESG and corporate value. This article analyzes literature in the international financial field related to ESG in recent years and explores the way ESG influences corporate value from the perspectives of impact, influencing mechanism, and heterogeneity. The aim is to provide insights into future research directions in this field. This article found that there are three impacts of ESG performance on corporate value: promotion, inhibition, or irrelevance. ESG performance mainly affects corporate value from four aspects: financing constraints, green innovation, corporate efficiency, and corporate risk. The heterogeneity of ESG performance mainly depends on factors such as property rights, marketization degree, information transmission efficiency, company size, and industry environmental sensitivity. Future research on ESG should be centered on empirical research that examines ESG’s comprehensive influence and regional heterogeneity of ESG performance.