Research On The Impact Of ESG Perfo Rmance On Enterprise Value And Risk

The continuous development and progress of industrial civilization has brought huge economic growth to human society,but the social and environmental problems behind it have also made people generally realize that the traditional industrial civilization is difficult to sustain,and it is urgent to shift the focus of work from the development of industrial civilization to the construction of ecological civilization.With the continuous advancement of ecological civilization construction,the focus of international investment has gradually shifted from the original CSR to ESG(Environment,Social,Governance).ESG has placed the environment,social responsibility and corporate governance in the same important position,with more rich connotation,and has become an important basis for measuring the high-quality development ability of enterprises globally.At present,the foreign ESG investment market has been relatively mature,but the domestic ESG practice is still in the early stage of development and still faces many challenges.Some enterprises have insufficient awareness,attention and resource investment of ESG concept.Domestic scholars have different conclusions on whether and what impact ESG performance has on enterprises.In particular,there are few previous studies on the impact of ESG performance on enterprise value,and no consistent conclusions have been drawn,especially on the impact of ESG performance on enterprise risk.Therefore,clarifying the impact of ESG performance on enterprise value and enterprise risk will help enterprises realize the importance of ESG performance on their own development,so as to adhere to the sustainable strategy in the process of self improvement and sustainable development;At the same time,it is also helpful for regulators to judge the compliance of enterprises’ daily operation and management by using ESG indicators,and focus on strengthening policy guidance,so as to improve the capital market environment and promote the high-quality development of the national economy.Based on this,this paper explores the impact and mechanism of ESG performance on enterprise value and enterprise risk from both theoretical and empirical aspects.In terms of theoretical research,based on the comprehensive analysis of stakeholder theory,reputation theory,information transmission theory and other theories,this paper demonstrates the impact of ESG performance on enterprise value and enterprise risk,as well as the regulatory role of executive compensation incentive;Explore whether it will further promote the role of ESG performance in promoting enterprise value and inhibit the role of ESG performance in reducing enterprise risk.At the same time,considering that the role of ESG performance on enterprise value and enterprise risk may be affected to some extent by property rights and industry characteristics,non-state-owned enterprises’ positive improvement of ESG performance may be more conducive to the promotion of enterprise value,while the good performance of state-owned enterprises’ ESG may be more effective in reducing enterprise risk;Enterprises in heavy pollution industries can better meet the requirements of stakeholders by actively improving their ESG performance,thus effectively improving enterprise value and reducing enterprise risk.In terms of empirical research,this paper selects the financial data of 3821 A-share listed companies in Shanghai and Shenzhen from 2012 to 2019.With reference to classical literature,it uses the ESG rating data of WIND financial terminal Huazheng as a measure of the enterprise’s ESG performance,and measures the enterprise value and enterprise risk with Tobin Q ratio and stock return volatility,The fixed effect regression model of panel data was used to explore the impact of ESG performance on enterprise value and enterprise risk.Subsequently,this paper takes monetary compensation incentive and equity incentive for senior executives as adjusting variables respectively to study whether they will play a regulatory role in the relationship between ESG performance and enterprise value and risk,and further improve and deepen the research on the impact of ESG performance on enterprise value and risk.Finally,the samples are grouped based on property right attributes and industry characteristics,and the heterogeneity analysis is conducted according to the grouping regression results.In addition,this paper also conducts an endogenous test,and uses the method of replacing the explained variable measurement index to conduct a robustness test.The empirical results show that: 1、enterprises can improve their value and reduce their risk by improving their ESG performance;2 、Executive compensation incentive can positively regulate the relationship between ESG and enterprise value,and negatively regulate the relationship between ESG and enterprise risk;Among them,monetary incentive plays a more significant role than equity incentive;3、The positive implementation of ESG concept by non-state-owned enterprises has a more significant effect on the improvement of enterprise value than that of state-owned enterprises.The more actively the state-owned enterprises improve the performance of ESG,the more obvious the role of enterprise risk reduction.Compared with non heavily polluting enterprises,heavily polluting enterprises can effectively promote enterprise value and reduce enterprise risk by increasing ESG investment.The research conclusions of this paper can provide investors with decision-making basis,make enterprises deeply aware of the impact of actively improving ESG performance on their own value and risk,and then establish a sustainable development business philosophy,and enhance the reputation and image of enterprises.