Research on ESG Performance and Financial Risk of A-share Listed Companies

Abstract

The purpose of this study is to explore the relationship between ESG performance and financial risks of A-share listed companies, and to analyze whether good ESG practices can help reduce financial risks. Taking A-share listed companies from 2013 to 2023 as samples, this paper examines the direct impact of ESG performance on financial risks and its mechanism through empirical analysis. On this basis, heterogeneity analysis and robustness test are carried out to ensure the wide applicability and reliability of the research results. Research shows that excellent ESG performance significantly reduces the financial risks of enterprises, and this conclusion is still valid under the background of global policy changes and increasing climate pressure. Especially for enterprises that occupy an important position in the global supply chain and face high policy uncertainty, ESG performance plays a particularly prominent role in reducing the cost of debt financing. Under the conditions of high marketization and high quality of internal control, excellent ESG performance has a more significant effect on alleviating financial risks in non-state-owned and non-heavily polluting enterprises. This study provides theoretical support for ESG investment and risk assessment under the background of globalization. The research results provide a reference for enterprise management and international investors, and help them to reasonably evaluate the impact of ESG performance on their financial stability and long-term value in the context of the current global climate policy tightening and social responsibility requirements.