Research On The Effect Of ESG On The Performance Of Financial Intermediaries

With the continuous deepening and promotion of cooperation between China and relevant countries along the “Belt and Road”,China financial development needs more international recognition and requires the construction of environmental,social,and corporate governance(ESG)systems.Environmental,Social and Governance(ESG)refers to the environmental,social and corporate governance performance considered in corporate decisions.ESG information disclosure refers to the release of a company's environmental,social,governance,and financial management information in a comprehensive,timely,and accurate manner by a securities company,so that the market can make a reasonable judgment on the value of the investment to protect the legitimate rights and interests of shareholders or creditors.Since 1992,the United Nations Environment Programme Financial Institutions(UNEPFI)has been working to incorporate financial institutions' ESG ratings into the decision-making process.In recent years,ESG has gradually become the main consideration for the international community to measure the sustainable development capabilities of economic entities.How to achieve sustainable development while maintaining profits has become a problem that must be faced.At the international or regional level,according to the results of Schroder's investment survey,emerging market investors pay more attention to investment concepts,and ESG investment strategies have proven to bring excess returns.People are paying more and more attention to this topic,and have done a lot of research on the relationship between ESG activity performance and company performance.For China,ESG is still a relatively new concept.China's ESG system started late.Quite a few listed companies have begun to study special disclosures in recent years.International investment institutions such as Morgan Stanley launched an ESG rating on A-share listed companies in2018.Domestic institutional investors have also begun to pay more attention to the great value and potential of ESG..However,there are few domestic studies on the relationship between ESG and financial performance.The existing research focuses on the energy industry.Studies on the construction and rating of ESG evaluation index systems for financial intermediaries and their relationship with financial performance are even rarer.From these considerations,the research goals of this article are twofold.One is to explore the correlation between ESG and financial performance.Explore whether the relationship between the scale of ESG disclosure and profitability formulated by financial intermediaries is special;the second is to compare the possible differences between industrial companies and financial intermediaries on this issue.This article mainly summarizes and summarizes the theoretical and empirical research literature from the three aspects of the ESG concept and evaluation system,the impact of ESG on corporate performance,and the impact of ESG on financial intermediary institutions.After reviewing the related research on the impact of ESG on the performance of financial intermediary institutions,it is proposed that ESG may have special effects on the performance of financial intermediary institutions and the selection of financial performance indicators of financial intermediary institutions.By analyzing the development and trends of existing research,the innovation points of this research are put forward.This paper first conducts a theoretical analysis of the impact mechanism of ESG on corporate performance.This paper analyzes theoretically the impact mechanism of ESG on corporate performance.The 509 companies selected in the Fortune Global 500 for 2017-2019 were selected as samples,and the relevant financial data and ESG data for 2013-2018 were obtained through the osiris database and the MSCI ESG rating data set,and researchhypotheses were proposed and ESG Scoring index,using multiple linear regression and VIF test methods to build a research model.The main research conclusions include: The empirical analysis of sample data shows that ESG performance is positively correlated with corporate performance(measured by ROA).The effect of ESG performance of financial intermediaries on corporate performance(ROA)is stronger than that of industrial companies.Among the three dimensions of ESG,the social responsibility dimension has the strongest effect on improving the performance index of financial intermediaries' ROA.Compared with industrial companies,the practical performance of the E environment dimension in the sample of financial intermediaries is more important,and it is positively related to the performance of financial intermediaries.The long-term effects of ESG performance of financial intermediaries on improving performance are more obvious.The implementation of environmental protection policies by financial intermediaries can increase the profitability of banks in the long run.Compared with the financial industry,the short-term effects of ESG performance of industrial enterprises are more obvious.It is necessary to always pay attention to ESG investment in the company's long-term strategy in order to maintain a sustained positive impact on the company's long-term performance.This also proves the particularity of the impact of financial intermediary ESG on corporate performance.The results of this study show that financial intermediaries can improve their financial performance by focusing on and improving ESG performance.Compared with industrial companies,this effect has a longer period of effect but a stronger effect.Financial intermediaries can enhance their profitability by strengthening their ESG practices,especially environmental protection.This article proposes the following:The impact of financial intermediary ESG performance on profitability will gradually increase over time,which requires sufficient patience andsupport from corporate decision makers.Financial intermediaries should continue to pay attention to the risks and opportunities brought by the implementation of ESG practices in order to shift to sustainable business.ESG practices include investing in sustainable development projects,designing products with ESG-related characteristics,and encouraging customers and stakeholders to invest in ESG products.Investors should pay more attention to the company's ESG disclosure information and rating results before making decisions.Supervisors and personnel should continue to guide enterprises(especially financial intermediaries)to disclose ESG and strengthen information transparency by formulating strict disclosure standards and principles.