Subject. The influence of ESG and its individual components – environmental, social, and corporate governance – on the financial performance of publicly listed companies in China. Objectives. To identify the ESG components that have the greatest impact on companies’ profitability and market valuation. Methods. The study applied analysis and synthesis methods. It employed a fixed-effects model across industries and years and used the HuaZheng rating. Results. It has been established that the ESG rating and all its components have a consistent positive impact on return on assets. Corporate governance exerts the strongest influence, while environmental and social aspects show relatively weaker effects. This is associated with time costs and financial expenses: green technology innovations require substantial capital investments, but their payback period is delayed. Conclusions. Companies have the opportunity to achieve short-term financial gains by improving the quality of corporate governance. Nevertheless, it is crucial to pay special attention to environmental and social governance issues – so that they do not turn into sources of regulatory risks in the future.
Strekalina A., Zakirova R., Shinkarenko A., Vatsanyuk E. [The impact of ESG ratings on financial performance of the companies: evidence from BRICS countries]. Korporativnye finansy, 2023, vol. 17, no. 4, pp. 93–113. (In Russ.) DOI: 10.17323/j.jcfr.20730438.17.4.2023.93113 EDN: QFPKDS
De Giuli M.E., Grechi D., Tanda A. What do we know about ESG and risk? A systematic and bibliometric review. Corporate Social Responsibility and Environmental Management, 2024, vol. 31, iss. 2, pp. 1096–1108. DOI: 10.1002/csr.2624 EDN: SYHBYU
Li W., Mei M., Yu X. et al. How Does ESG Performance Impact Corporate Financing Costs? An Empirical Study in China. Journal of Systems Science and Information, 2024, vol. 12, iss. 2, pp. 229–244. DOI: 10.21078/jssi-2023-0054 EDN: FGIMDT
Niu D., Wang Z. Can ESG ratings promote green total factor productivity? Empirical evidence from Chinese listed companies. Heliyon, 2024, vol. 10, no. 7, e29307. DOI: 10.1016/j.heliyon.2024.e29307 EDN: NRDJEU
Tian X. ESG Rating and Cost of Capital. Advances in Economics, Management and Political Sciences, 2023, vol. 27, no. 1, pp. 224–230. DOI: 10.54254/2754-1169/27/20231267 EDN: GQAJUG
Rahmah N.A., Purwohedi U., Handarini D. The moderating role of profitability and firm size in ESG disclosure towards firm value. International Journal of Education, Social Studies, And Management (IJESSM), 2024, vol. 4, iss. 2, pp. 700–719. DOI: 10.52121/ijessm.v4i2.345 EDN: XICJMY
Zhao H., He Z., Banerjee T., Han T. ESG rating divergence and firm value: Evidence from China. Applied Economics Letters, 2025, pp. 1–7. DOI: 10.1080/13504851.2024.2449560
Priyanto P., Suhandi N.P.M. Unraveling the Link: Relationship Firm Value Shapes ESG Ratings. JABE (Journal of Accounting and Business Education), 2023, vol. 8, no. 2, p. 61. DOI: 10.17977/jabe.v8i2.44972 EDN: LMXJUZ
Feng M., Yu W., Wang X. et al. Green supply chain management and financial performance: The mediating roles of operational and environmental performance. Business strategy and the Environment, 2018, vol. 27, iss. 7, pp. 811–824. DOI: 10.1002/bse.2033
Owoola W.A., Olaniyo B.A., Obeka O.D. et al. Adaptive business policies for the energy transition: Balancing short-term profitability with long-term sustainability in oil and gas companies. GSC Advanced Research and Reviews, 2024, vol. 21, iss. 1, pp. 439–450. DOI: 10.30574/gscarr.2024.21.1.0397 EDN: XJQHGU
Li X., Saat M.M., Liu Y. The impact of environmental performance on firm value: Evidence from listed companies in China. International Journal of Academic Research in Business and Social Sciences, 2024, vol. 14, iss. 7, pp. 1140–1150. URL: Link
Sun L., Bai C., Sarkis J. Reward or punishment? The impact of heterogeneous environmental regulatory intervention on the firm market value. Business Strategy and the Environment, 2024. DOI: 10.1002/bse.36 EDN: BTAAFI
Komara A., Fristianti E., Novi N. The Effect of Environmental Costs, Environmental Disclosure, Environmental Performance, and Profitability on Firm Value. Journal Research of Social Science, Economics, and Management, 2024, vol. 3, iss. 10, pp. 1852–1863. DOI: 10.59141/jrssem.v3i10.645 EDN: BMJELO
Yu X., Xiao K. Does ESG Performance Affect Firm Value? Evidence from a New ESG-Scoring Approach for Chinese Enterprises. Sustainability, 2022, vol. 14, iss. 24, 16940. DOI: 10.3390/su142416940 EDN: ZFFPRX
Dorothy P., Endri E. Environmental, social and governance disclosure and firm value in the energy sector: The moderating role of profitability. Problems and Perspectives in Management, 2024. vol. 22, iss. 4, pp. 588–599. DOI: 10.21511/ppm.22(4).2024.44 EDN: TJBUMQ
Zhang C. Evaluating the impact of environmental, social, and governance factors on firm performance and value: An empirical analysis of selected Australian corporations. Journal of Governance and Regulation, 2024, vol. 13, iss. 4, pp. 106–116. DOI: 10.22495/jgrv13i4art11 EDN: SUPSOU
Wang J. ESG Performance, Firm Heterogeneity, and the Speed of Dynamic Adjustment of Capital Structure: Evidence from China. Advances in Economics, Management and Political Sciences, 2024, vol. 91, no. 1, pp. 111–119. URL: Link
Liu H., Wu K., Zhou Q. Whether and How ESG Impacts on Corporate Financial Performance in the Yangtze River Delta of China. Sustainability, 2022, vol. 14, no. 24, 16584. DOI: 10.3390/su142416584 EDN: JUKVUD
Guo Y. The Impact of ESG Performance on the Financial Performance of Chinese High-Tech and Internet Industry Firms. Applied Science and Innovative Research, 2024, vol. 8, no. 4. DOI: 10.22158/asir.v8n4p48 EDN: DXWHTD
Said Y., Khayal Z.A.E., Srour H.M. The Egyptian Stock Market: Herding Behavior, ESG Indexes, and Market Capitalization (An Empirical Study). Preprints, 2024. DOI: 10.20944/preprints202405.0055.v1
Krishnan C.N.V., Yang J., Tan X. Do Environmental, Social, and Governance (ESG) Factors Matter? Analyzing the Relationships Between Firm Characteristics and ESG Scores. Businesses, 2024, vol. 4, iss. 4, pp. 566–581. DOI: 10.3390/businesses404003 EDN: IYVWTQ
Kristek I., Turjak S. Market capitalisationand environmental, social and governance ratings in the European Union. Ekonomski vjesnik, 2023, vol. 36, iss. 2, pp. 327–336. DOI: 10.51680/ev.36.2.8
