Financial Shared Service Centres and Corporate Sustainability: Empirical Evidence from ESG Performance

Abstract

This paper uses data from Chinese listed companies (2013–2023) to investigate how financial shared service centres (FSSCs) affect ESG performance. The results indicate that through strengthening internal controls, environmental protection, and employment standards, FSSCs considerably improve ESG performance. After controlling for endogeneity and employing different variable measures, these impacts are still strong. Additionally, this relationship is positively moderated by corporate digital transformation; FSSCs have a greater ESG impact on companies with greater digital maturity. The impact is most noticeable for the East-Central Chinese businesses, state-owned enterprises, and those with limited funding. These findings provide important direction for policymakers seeking to advance sustainable business practices through organisational change and demonstrate how internal management innovations, such as FSSCs, can help achieve the Sustainable Development Goals (SDGs).