The Impact Of ESG Rating On Earnings Management Of Listed Companies

As the construction of ecological civilization is included in the overall layout of the "Five in One" cause of socialism with Chinese characteristics,China’s economic development is gradually transforming,and the development of green industries has become a new economic growth point.helping to achieve the goals of "carbon neutrality" and "carbon peak".Therefore,reducing environmental pollution levels,actively fulfilling social responsibilities and enhancing governance capabilities,and guiding the market to increase investment in green industries to encourage enterprises to consciously enhance their sustainable development capabilities are all key issues facing the current construction of ecological civilization.In this context,the proposal of the ESG concept is an extension and enrichment of the concepts of green investment and responsible investment,and an important measure to help achieve the"dual carbon" goal.It will also have a significant impact on micro enterprises.There has been no research discussing the impact of ESG ratings on earnings management of listed companies.This article aims to explore the correlation and impact mechanism between the two from this perspective.On the basis of reviewing relevant literature at home and abroad,this article analyzes how environmental performance(E),social responsibility(S),and corporate governance(G)of listed companies affect earnings management,and proposes research hypotheses based on this.Using the ESG rating index of listed companies issued by the commercial financial and green rating agency,and taking China’s A-share listed companies in Shanghai and Shenzhen Stock Exchanges from 2015 to 2020 as a sample,using basic regression analysis,mesomeric effect regression analysis,moderating effect regression analysis,replacement model regression analysis and other methods,the following conclusions are drawn:there is a significant negative correlation between the ESG rating of listed companies and earnings management,The ESG rating of listed companies can help reduce earnings management behavior.The intermediary mechanism test shows that ESG rating achieves an improvement effect on the quality of earnings management by strengthening external governance of enterprises.Heterogeneity analysis found that the negative impact of ESG rating on earnings management is more significant in non-state-owned enterprises,enterprises with lower performance,and enterprises with poor internal control quality.The research results of this article remain robust after a series of tests.According to the conclusion of this article,enterprises should pay more attention to improving their environmental protection capabilities,grasp the overall direction,strengthen their sense of social responsibility towards various stakeholders,and establish a more comprehensive corporate governance mechanism.The long-term goal is to improve ESG performance to reduce earnings management level and improve accounting information quality.On the one hand,this article has important theoretical significance,enriching the depth and breadth of research on ESG ratings and earnings management of listed companies.On the other hand,it has important practical significance,helping enterprises to build a good image while enhancing long-term value.It also helps the government and other departments formulate relevant development and regulatory policies.It has certain reference significance for countries to achieve high-quality economic development transformation under the background of the "dual carbon" policy.