IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i16p6952-d1455717.html
   My bibliography  Save this article

Leading Sustainability: The Impact of Executives’ Environmental Background on the Enterprise’s ESG Performance

Author

Listed:
  • Qian Zhang

    (School of Journalism and Communication, Xiamen University, Xiamen 361005, China
    School of Humanity and Law, Wuhan Technology and Business University, Wuhan 430065, China)

  • Linfang Tan

    (School of Law and Business, Wuhan Institute of Technology, Wuhan 430205, China)

  • Da Gao

    (School of Law and Business, Wuhan Institute of Technology, Wuhan 430205, China)

Abstract

Improving corporate ESG performance is regarded as a useful means to promote low-carbon transformation. Based on executive echelon theory, this study uses textual analysis to identify the executives’ environmental background characteristics and explores the impact on the company’s ESG performance, using data on China’s A-share listed companies from 2009 to 2021. The empirical results show that (1) the environmental background of executives has a positive impact on the enterprise’s ESG performance, and a series of robustness tests reconfirm this finding. (2) The mediating effect model shows that the executives’ environmental background can trigger environmental investment and the green innovation effect, improving the enterprise’s ESG performance. (3) The heterogeneity analysis shows that the impact of the environmental background of executives on the firm’s ESG performance is more sensitive in non-state-owned and heavily polluting enterprises. (4) Improving corporate ESG performance can also promote economic performance and achieve the dual goals of the “environment + economy”. The conclusions in this study provide a theoretical basis and practical enlightenment for the government to formulate environmental policies.

Suggested Citation

  • Qian Zhang & Linfang Tan & Da Gao, 2024. "Leading Sustainability: The Impact of Executives’ Environmental Background on the Enterprise’s ESG Performance," Sustainability, MDPI, vol. 16(16), pages 1-18, August.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:16:p:6952-:d:1455717
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/16/6952/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/16/6952/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Agliardi, Elettra & Alexopoulos, Thomas & Karvelas, Kleanthis, 2023. "The environmental pillar of ESG and financial performance: A portfolio analysis," Energy Economics, Elsevier, vol. 120(C).
    2. Tang, Meili & Wang, Yu, 2022. "Tax incentives and corporate social responsibility: The role of cash savings from accelerated depreciation policy," Economic Modelling, Elsevier, vol. 116(C).
    3. Petra Moser & Alessandra Voena, 2012. "Compulsory Licensing: Evidence from the Trading with the Enemy Act," American Economic Review, American Economic Association, vol. 102(1), pages 396-427, February.
    4. Aabo, Tom & Giorici, Iasmina Cristina, 2023. "Do female CEOs matter for ESG scores?," Global Finance Journal, Elsevier, vol. 56(C).
    5. He, Kang & Chen, Wanyi & Zhang, Liguang, 2021. "Senior management's academic experience and corporate green innovation," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    6. Samuel Drempetic & Christian Klein & Bernhard Zwergel, 2020. "The Influence of Firm Size on the ESG Score: Corporate Sustainability Ratings Under Review," Journal of Business Ethics, Springer, vol. 167(2), pages 333-360, November.
    7. Xiuli Sun & Cui Zhou & Zhuojiong Gan, 2023. "Green Finance Policy and ESG Performance: Evidence from Chinese Manufacturing Firms," Sustainability, MDPI, vol. 15(8), pages 1-27, April.
    8. Junli Wang & Wendong Lv, 2023. "Research on the Impact of Green Innovation Network Embeddedness on Corporate Environmental Responsibility," IJERPH, MDPI, vol. 20(4), pages 1-28, February.
    9. Zhou, Taiyun & Gan, Jiawu, 2022. "Institutional investors' site visits and corporate social responsibility: Evidence from China," Economic Modelling, Elsevier, vol. 115(C).
    10. Avramov, Doron & Cheng, Si & Lioui, Abraham & Tarelli, Andrea, 2022. "Sustainable investing with ESG rating uncertainty," Journal of Financial Economics, Elsevier, vol. 145(2), pages 642-664.
    11. Anrong Gao & Tianren Xiong & Yuxi Luo & Defeng Meng, 2023. "Promote or Crowd Out? The Impact of Environmental Information Disclosure Methods on Enterprise Value," Sustainability, MDPI, vol. 15(4), pages 1-19, February.
    12. Ren, Xiaohang & Zeng, Gudian & Zhao, Yang, 2023. "Digital finance and corporate ESG performance: Empirical evidence from listed companies in China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    13. Huang, Jiekun & Kisgen, Darren J., 2013. "Gender and corporate finance: Are male executives overconfident relative to female executives?," Journal of Financial Economics, Elsevier, vol. 108(3), pages 822-839.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shu, Hao & Tan, Weiqiang, 2023. "Does carbon control policy risk affect corporate ESG performance?," Economic Modelling, Elsevier, vol. 120(C).
    2. Chen, Yongtai & Ren, Yi-Shuai & Narayan, Seema & Huynh, Ngoc Quang Anh, 2024. "Does climate risk impact firms' ESG performance? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 683-695.
    3. Ren, Xiaohang & Zeng, Gudian & Sun, Xianming, 2023. "The peer effect of digital transformation and corporate environmental performance: Empirical evidence from listed companies in China," Economic Modelling, Elsevier, vol. 128(C).
    4. Minjuan Wang & Dingsheng Zhang, 2024. "Big Data Infrastructure and Corporate ESG Performance: Evidence from Listed Chinese Manufacturing Companies," Sustainability, MDPI, vol. 16(12), pages 1-24, June.
    5. Diana Elena VASIU, 2024. "Esg Rates Divergence On The Emerging Markets In The European Union," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 19(2), pages 274-289, August.
    6. Qingmin Yin & Nan Su & Chenhui Ding, 2024. "The Nonlinear Effects of Digital Finance on Corporate ESG Performance: Evidence from China," Sustainability, MDPI, vol. 16(18), pages 1-27, September.
    7. Liyuan Meng & Yuchen Zhang, 2023. "Impact of Tax Administration on ESG Performance—A Quasi-Natural Experiment Based on China’s Golden Tax Project III," Sustainability, MDPI, vol. 15(14), pages 1-23, July.
    8. Wang, Zhen & Chu, Erming & Hao, Yukai, 2024. "Towards sustainable development: How does ESG performance promotes corporate green transformation," International Review of Financial Analysis, Elsevier, vol. 91(C).
    9. Fiordelisi, Franco & Ricci, Ornella & Santilli, Gianluca, 2023. "Environmental engagement and stock price crash risk: Evidence from the European banking industry," International Review of Financial Analysis, Elsevier, vol. 88(C).
    10. Jin Zhu & Fei Huang, 2023. "Transformational Leadership, Organizational Innovation, and ESG Performance: Evidence from SMEs in China," Sustainability, MDPI, vol. 15(7), pages 1-23, March.
    11. Xiaoyan Xu & Hong Zhao, 2024. "An Empirical Study on ESG Evaluation of Chinese Energy Enterprises Based on High-Quality Development Goals—A Case Study of Listed Company Data," Sustainability, MDPI, vol. 16(15), pages 1-22, August.
    12. Lulu Huang & Qiannan Liu, 2024. "The Impact of Natural Disasters on Corporate ESG Performance: Evidence from China," Sustainability, MDPI, vol. 16(12), pages 1-14, June.
    13. Zeng, Yongliang & Zhao, Xiangfang & Zhu, Yiwen, 2023. "Equity incentives and ESG performance: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PC).
    14. Zhu, Bo & Wang, Yansen, 2024. "Does social trust affect firms' ESG performance?," International Review of Financial Analysis, Elsevier, vol. 93(C).
    15. Deli Wang & Ke Peng & Kaiye Tang & Yewei Wu, 2022. "Does Fintech Development Enhance Corporate ESG Performance? Evidence from an Emerging Market," Sustainability, MDPI, vol. 14(24), pages 1-21, December.
    16. Caterina Lucarelli & Sabrina Severini, 2024. "Anatomy of the chimera: Environmental, Social, and Governance ratings beyond the myth," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4198-4217, July.
    17. Chang Liu & Zihao Xin, 2024. "Does environmental, social, and governance practice boost corporate human capital inflow in China? From the perspective of stakeholder response," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3251-3273, July.
    18. Renhong Wu & Jinbao Li & Yunhai Dai & Xiangdong Shen & Md. Alamgir Hossain, 2024. "Impact of Environmental, Social, and Governance on Innovation in Chinese Listed Firms," Sustainability, MDPI, vol. 16(17), pages 1-24, August.
    19. Qu, Xueping & Xu, Aidi, 2023. "Ways to promote investments in sustainable energy utilities in the central Asian regional economic cooperation program region," Utilities Policy, Elsevier, vol. 84(C).
    20. Liang, Yuchao & Tan, Qi & Pang, Jun, 2024. "Bless or curse, how does extreme temperature shape heavy pollution companies' ESG performance?-Evidence from China," Energy Economics, Elsevier, vol. 131(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:16:y:2024:i:16:p:6952-:d:1455717. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.