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The Impact of Corporate Environmental, Social, and Governance Performance on Total Factor Productivity: An Analysis of the Moderating Effect of Environmental Uncertainty

Year: 2025

Type: article

Abstract: Environmental, Social, and Governance (ESG) performance has become a vital instrument for corporations to integrate sustainable development principles into business operations. Against the dual backdrop of disruptions in the international order and economic instability, investigating the impact of corporate ESG performance on total factor productivity (TFP) under environmental uncertainty is of significant importance. Utilizing data from Chinese A-share listed companies spanning the period 2011 to 2022, this study employs a baseline regression model, a mediation effect model, a moderation effect model, and a moderated mediation model to examine the impact of corporate ESG performance on TFP under conditions of environmental uncertainty. The results indicate that (1) corporate ESG performance exerts a positive influence on TFP, particularly in tertiary industry firms, state-owned enterprises (SOEs), and enterprises with lower environmental risks; (2) improving ESG performance helps alleviate financing constraints, enhance human capital, and boost innovation capability, thereby strengthening TFP; and (3) environmental uncertainty moderates the pathway through which ESG performance affects TFP, amplifying its positive effect. Based on these findings, it is recommended that countries collaborate to establish a global, cross-industry platform for sharing ESG practices, develop a stable ESG policy framework and incentive mechanisms, and encourage enterprises to enhance their ESG management and resilient governance capabilities to promote sustainable economic development.

Source: Sustainability

DOI: 10.3390/su17198552

Authors: Yuan Li, Yongchun Huang, Yupeng Zhao, Zi Ye

Institutions: Hohai University, Jiangsu Open University

Language: English

Topic: Corporate Social Responsibility Reporting

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: gold

Estimated APC paid: $2,896