Research On The Impact Of Esg Practices On Corporate Value

With the rapid economic growth,the world is facing increasingly serious environmental and resource challenges,and in order to reduce the phenomenon of environmental damage and waste of resources due to excessive pursuit of profits,international organizations advocate the promotion of development while focusing on environmental protection to promote sustainable economic development.ESG consists of Environmental,Social and Governance.With the introduction of "Double Carbon" in China in recent years,ESG concept has been further developed in China.The ESG concept requires companies to focus not only on financial information,but also on non-financial performance improvement,actively assume social responsibility in the process of operation,and strive to achieve economic and social benefits.This thesis mainly adopts the case study method,and after combing the existing literature on ESG,corporate value and the relationship between them,takes the ESG practice of LONGi Green Energy as the research object and investigates the impact of LONGi Green Energy’s ESG practice on its corporate value based on relevant theories.Firstly,this thesis reviews the relevant studies of domestic and foreign scholars on the motivation of ESG practice and the relationship between ESG and corporate value.Secondly,this thesis introduces the basic situation of the case company LONGi Green Energy and the motivation of ESG practices,summarizes its specific practices at the three levels of environment,social responsibility and corporate governance,and analyzes the paths through which ESG practices affect corporate value.Finally,this thesis analyzes the impact of ESG practices on the financial performance,financial position and enterprise value from the perspective of book value and market value,respectively.This thesis finds that LONGi Green Energy actively engages in ESG practices,responds to national strategies to help carbon neutrality,and its good performance in environmental dimension enhances corporate reputation and helps reduce corporate business risks.In addition,LONGi Green Energy actively undertakes social responsibility,pays attention to stakeholders’ interests and continuously improves its corporate governance structure,and continuously increases its R&D investment to enhance its core competitiveness,at the same time with the disclosure of corporate information to further reduce the degree of information asymmetry between investors and companies,which is conducive to stable growth of cash inflow and low financing cost,and ultimately leads to an increase in enterprise value.From the perspective of book value,ESG practices enhance the profitability,solvency and operating capacity of LONGi Green Energy compared with companies in the same industry,which helps it maintain a good financial position.From the market value perspective,good ESG practices have contributed to the rise of LONGi Green’s stock price,which has a positive impact on the long-term sustainable development of the company.All in all,as an important part of national economic development,enterprises should actively engage in ESG practices to achieve their own development and promote sustainable social development at the same time.