ORIGINAL RESEARCH article
Front. Sustain.
Sec. Sustainable Organizations
Volume 6 - 2025 | doi: 10.3389/frsus.2025.1637126
Executive Equity Incentives and Corporate Environmental, Social and Governance Performance
Provisionally accepted
- University of Chinese Academy of Social Sciences (UCASS), Beijing, China
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Environmental, Social and Governance (ESG) reflects a company's sustainable development capabilities, and equity incentives, as an important means of internal corporate governance, can enhance ESG performance by alleviating agency conflicts. This study, based on data from Chinese A-share listed companies from 2010 to 2023, using a two-way fixed-effect estimator to probe whether and how a firm's executive shareholding influences the ESG performance. The results indicate: First, executive shareholding significantly promotes corporate ESG performance, and the conclusion remains robust after a series of robustness tests. Second, mechanism analysis shows that executive shareholding enhances corporate ESG performance by promoting green innovation, encouraging charitable donations, and improving management efficiency. Third, heterogeneity analysis reveals that executive shareholding has a more significant promoting effect on the ESG performance in non-state-owned enterprises, high-pollution enterprises, low-equity concentration enterprises, and non-CEO duality enterprises. The study provide new insights for companies to enhance their ESG performance through internal institutional design and offer important implications for promoting high-quality economic development in China.
Keywords: ESG performance, Executive shareholding, green innovation, Charitable donations, Management efficiency
Received: 29 May 2025; Accepted: 28 Jul 2025.
Copyright: © 2025 Zhang, Li and He. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Li He, University of Chinese Academy of Social Sciences (UCASS), Beijing, China
Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.