ESG Scores and Environmental Protection Investment: Evidence from Listed Companies in China

Abstract

The ESG concept has increasingly permeated the day-to-day management and strategic choices of companies in recent years. Within industries, regions and company sizes, all organizations have been allocating more resources to improving ESG. How does ESG scores affect corporate environmental investment? Exploring this question allow us to better understand the activities of corporate environmental investment, also be aware of the effectiveness of government's environmental regulation and industry regulation. Based on a panel of 615 Chinese listed corporates from 2019-2021 from CSMAR, the paper found: (1) For EPI of A-share listed companies, the amount was generally sufficient from 2019 to 2021, which is incompatible with previous discoveries. (2) There is a statistically significant relationship between the score of ESG and the amount of EPI. (3) The additional effect of centralized shareholding on the positive relationship remains unclear after robustness test. The findings above not only broaden the research perspective of EPI and ESG, but also enrich academic research on environmental management.