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Do Green Finance Policies Foster Environmental, Social, and Governance Performance of Corporate?

Author

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  • Xingshuai Wang

    (School of Economics, Shandong University of Technology, Zibo 255000, China)

  • Ehsan Elahi

    (School of Economics, Shandong University of Technology, Zibo 255000, China)

  • Zainab Khalid

    (School of Economics and Management, Southeast University, Nanjing 210096, China)

Abstract

The green finance policy is crucial for enterprises to participate in environmental governance actively. Taking the “Green Credit Guidelines” issued by China in 2012 as a quasi-natural experiment, this study investigated the impact of green finance policies on corporate environmental, social, and governance (ESG) performance by using a continuous Difference-in-Differences (DID) model based on the data of listed companies from 2006 to 2020. The conclusions are: (1) The green finance policy significantly improves corporate ESG, but the effects vary across enterprises. (2) The policy has encouraged enterprises to develop and adopt green products and technologies. Still, it has not had a positive effect on the treatment of enterprise pollutant emissions because the implementation of the policy makes enterprises pay more attention to front-end risk control than pollution treatment after production. (3) Research results have heterogeneity. The impact of green finance policies on enterprises at different levels of environmental regulation is different. Enterprises in areas with high intensity of environmental regulation are more vulnerable to green credit. The conclusion of this paper helps improve the green finance policy system, enhance the awareness and level of corporate ESG, and strengthen the collaborative governance of policies and enterprises on environmental issues in combination with the mandatory environmental regulations and incentive mechanisms to promote the green development of enterprises and realize the goal of carbon neutrality.

Suggested Citation

  • Xingshuai Wang & Ehsan Elahi & Zainab Khalid, 2022. "Do Green Finance Policies Foster Environmental, Social, and Governance Performance of Corporate?," IJERPH, MDPI, vol. 19(22), pages 1-15, November.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:22:p:14920-:d:971246
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    Cited by:

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    2. Chaoyu Cao & Qibo Chen & Lili Zhu, 2024. "Corporate Greenwashing Unexpectedly Caused by the Green Credit Policy: A Comparison between Environmental Sustainability Information Disclosure and Actual Environmental Protection Investment from Chin," Sustainability, MDPI, vol. 16(17), pages 1-14, August.
    3. Xingshuai Wang & Ehsan Elahi & Zainab Khalid & Mohammad Ilyas Abro, 2023. "Environmental Governance Goals of Local Governments and Technological Innovation of Enterprises under Green Performance Assessment," IJERPH, MDPI, vol. 20(3), pages 1-19, January.
    4. Fei Xu & Xingyu Zhu & Mingke Li, 2024. "Environmental, Social, and Governance Information Rating and Firm Uncertainty Perception, Evidence from China Listed Firms," Sustainability, MDPI, vol. 16(14), pages 1-15, July.
    5. Syed Shoaib Nazir & Taimur Ashiq & Mazhar Farid Chishti & Riffat Ullah & Athar Marwat, 2024. "Assessing Financial Stability through ESG: The Impact of Sustainable Finance on Commercial Banks listed in Pakistan Stock Exchange (PSX)," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(3), pages 120-129.
    6. Yangjie Liao & Xiaokun Zhou, 2024. "Real green or fake green? Impact of green credit policy on corporate ESG performance," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-13, December.

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