ORIGINAL RESEARCH article
Front. Sustain.
Sec. Sustainable Organizations
The Impact of ESG Environmental Performance on Corporate Performance: Evidence from China
Provisionally accepted
Di Wu*
Qingxin Zhu- Jinling Institute of Technology, Nanjing, China
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Against the backdrop of global sustainable development, how to translate environmental performance under the ESG framework into tangible corporate outcomes remains a pressing issue that warrants in-depth investigation. Drawing on data from China's A-share listed firms from 2006 to 2022, this study empirically examines the impact of ESG environmental performance on corporate performance. The results reveal that ESG environmental performance significantly enhances corporate performance. This finding remains robust after addressing potential endogeneity by employing analyst attention as an instrumental variable and treating the implementation of the Environmental Protection Law as a quasi-natural experiment. The mechanism analysis indicates that green innovation serves as a crucial channel through which ESG environmental performance promotes corporate performance. Further, the moderating analysis shows that firms with stronger market competitiveness amplify the positive effect of ESG environmental performance on corporate performance. This amplification arises from the dual mechanism of strengthening the contribution of green innovation to firm performance while simultaneously weakening the driving effect of ESG environmental performance on green innovation. The heterogeneity analysis demonstrates that the positive impact of ESG environmental performance on corporate performance is more pronounced among non-state-owned enterprises, firms with executives holding green backgrounds, companies without environmental penalties, and those operating in non-high-tech and non-high-pollution industries. Overall, this study provides theoretical support for corporate green transformation and offers valuable policy implications for optimizing sustainable development strategies.
Keywords: SDGs goals, Environmental Dimension Performance, green innovation, Corporate performance, moderated mediation effect
Received: 03 Jul 2025; Accepted: 31 Oct 2025.
Copyright: © 2025 Wu and Zhu. 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: Di Wu, wudipjy@gmail.com
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