• Study on the impact of ESG performance on the Financial Performance of the Chinese Energy Industry

    LIN Mengyuan1, Takehiko Murayama1, Shigeo Nishikizawa1, Kultip Suwanteep1

    1. School of Environment and Society, Tokyo Institute of Technology, Japan, G5-9 4259 Nagatsuda, Midoriku, Yokohama, Kanagawa 226-8502, Japan.

    Abstract: Environmental, Social and Governance (ESG) aim to help investors increase investment value and create long-term returns, ultimately achieving sustainable development for society as a whole. This study examines the impact of ESG performance on the financial performance of Chinese energy companies, considering the dimensions of environmental, social, and governance factors. The objective is to understand how ESG performance can contribute to sustainable development and enhance investment value in line with the principles of sustainable and high-quality development in China. To achieve this, a sample of A-share listed energy companies in China was used. The research methodology involved constructing a fixed-effects model through cross-sectional data analysis and panel data analysis for regression. By empirically analyzing the data, this study aims to investigate the direct and differential effects of ESG performance on the financial performance of Chinese energy companies, considering the heterogeneity between traditional and renewable energy companies. The findings indicate that the ESG performance of Chinese energy companies directly and positively influences their financial performance. Furthermore, the impact of ESG performance on financial performance differs between traditional and renewable- energy companies. Additionally, this study examines whether green transformation acts as a mediating factor in the relationship between ESG performance and the financial performance of renewable energy companies. Robustness tests were conducted to ensure the reliability of the results. These tests aimed to validate the robustness and credibility of the findings, thereby enhancing the overall validity of the research outcomes.

    Key words: ESG Performance, Financial Performance, Return on assets (ROA), Energy Industry.

    Pages: 1 – 23 | Full PDF Paper