IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i9p3826-d1387786.html
   My bibliography  Save this article

Research on the Impact of Enterprise ESG Ratings on Carbon Emissions from a Spatial Perspective

Author

Listed:
  • Weiwei Yang

    (School of Economics and Management, Beijing University of Technology, Beijing 100124, China)

  • Yingying Hei

    (School of Economics and Management, Beijing University of Technology, Beijing 100124, China)

Abstract

Based on 208 city-level data in China, this paper empirically analyzes the impact of ESG rating on carbon emissions through the SDM spatial metrology model, identifies the direct and indirect consequences and spatial spillover effects of ESG rating on carbon emissions, and compares the regional heterogeneity and city-size heterogeneity of such impacts. This paper draws three conclusions: (1) Empirical evidence shows that the ESG rating performance of enterprises has a significant inhibition effect on carbon dioxide emissions. Specifically, when the ESG rating performance increases by 1%, carbon emissions will decrease by 0.076; among other control variables, the effect of FDI on carbon emission reduction is that when ESG score performance increases by 1%, carbon emission decreases by 0.022. (2) In the decomposition of the total effects, indirect effects and direct effects have the same impact on carbon emissions, and the total effect is −0.393. (3) The inhibition effect is more significant in the Eastern Region and in megacities, where the effect of −0.096 in the Eastern Region is more obvious than that of −0.078 at the national level, and the effect of carbon reduction in megacities is significantly greater than 0.013 in big cities. This suggests regional heterogeneity in regards to the role of ESG ratings in reducing CO 2 emissions. This paper reveals the specific effects and internal logic of the impact of ESG performance on CO 2 emissions, which has certain implications for various regions to further promote the construction of an ESG system, according to local conditions, and to encourage enterprises to focus on emission reduction and high-quality development.

Suggested Citation

  • Weiwei Yang & Yingying Hei, 2024. "Research on the Impact of Enterprise ESG Ratings on Carbon Emissions from a Spatial Perspective," Sustainability, MDPI, vol. 16(9), pages 1-20, May.
  • Handle: RePEc:gam:jsusta:v:16:y:2024:i:9:p:3826-:d:1387786
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/9/3826/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2071-1050/16/9/3826/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jan Schmitz & Jan Schrader, 2015. "Corporate Social Responsibility: A Microeconomic Review Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 29(1), pages 27-45, February.
    2. Zhuo Huang & Yunqing Tao & Xin Luo & Yongwei Ye & Tianyi Lei, 2023. "Regional digital finance and corporate investment efficiency in China," Applied Economics, Taylor & Francis Journals, vol. 55(43), pages 5115-5134, September.
    3. Baranzini, Andrea & Goldemberg, Jose & Speck, Stefan, 2000. "A future for carbon taxes," Ecological Economics, Elsevier, vol. 32(3), pages 395-412, March.
    4. Florian Berg & Julian F Kölbel & Roberto Rigobon, 2022. "Aggregate Confusion: The Divergence of ESG Ratings [Corporate social responsibility and firm risk: theory and empirical evidence]," Review of Finance, European Finance Association, vol. 26(6), pages 1315-1344.
    5. 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).
    6. Aaron K. Chatterji & Rodolphe Durand & David I. Levine & Samuel Touboul, 2016. "Do ratings of firms converge? Implications for managers, investors and strategy researchers," Strategic Management Journal, Wiley Blackwell, vol. 37(8), pages 1597-1614, August.
    7. Sun, Guanglin & Li, Ting & Ai, Yongfang & Li, Qinghai, 2023. "Digital finance and corporate financial fraud," International Review of Financial Analysis, Elsevier, vol. 87(C).
    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. Wang, Haijun & Jiao, Shuaipeng & Ge, Chen & Sun, Guanglin, 2024. "Corporate ESG rating divergence and excess stock returns," Energy Economics, Elsevier, vol. 129(C).
    2. Cauthorn, Thomas & Dumrose, Maurice & Eckert, Julia & Klein, Christian & Zwergel, Bernhard, 2023. "Rating changes revisited: New evidence on short-term ESG momentum," Finance Research Letters, Elsevier, vol. 54(C).
    3. Liu, Xiangqiang & Yang, Qingqing & Wei, Kai & Dai, Peng-Fei, 2024. "ESG rating disagreement and idiosyncratic return volatility: Evidence from China," Research in International Business and Finance, Elsevier, vol. 70(PB).
    4. Wang, Jianli & Wang, Shaolin & Dong, Minghua & Wang, Hongxia, 2024. "ESG rating disagreement and stock returns: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 91(C).
    5. Sanctuary, Mark & Lavenius, Axel & Parlato, Giorgio & Plue, Jan & Crona, Beatrice, 2024. "A study of green European equity fund portfolio allocations," Working Paper Series in Economics and Institutions of Innovation 499, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    6. DiMaria, charles-henri, 2024. "ESG principles: the limits to green benchmarking," MPRA Paper 120410, University Library of Munich, Germany, revised 2024.
    7. Zou, Jin & Yan, Jingzhou & Deng, Guoying, 2023. "ESG rating confusion and bond spreads," Economic Modelling, Elsevier, vol. 129(C).
    8. Yunfu Zhu & Haoling Yang & Ma Zhong, 2023. "Do ESG Ratings of Chinese Firms Converge or Diverge? A Comparative Analysis Based on Multiple Domestic and International Ratings," Sustainability, MDPI, vol. 15(16), pages 1-17, August.
    9. Francesco Cesarone & Lorenzo Lampariello & Davide Merolla & Jacopo Maria Ricci & Simone Sagratella & Valerio Giuseppe Sasso, 2023. "A bilevel approach to ESG multi-portfolio selection," Computational Management Science, Springer, vol. 20(1), pages 1-23, December.
    10. Luo, Deqing & Shan, Xun & Yan, Jingzhou & Yan, Qianhui, 2023. "Sustainable investment under ESG volatility and ambiguity," Economic Modelling, Elsevier, vol. 128(C).
    11. Darendeli, Alper & Fiechter, Peter & Hitz, Jörg-Markus & Lehmann, Nico, 2022. "The role of corporate social responsibility (CSR) information in supply-chain contracting: Evidence from the expansion of CSR rating coverage," Journal of Accounting and Economics, Elsevier, vol. 74(2).
    12. Wong, Jin Boon & Zhang, Qin, 2024. "ESG reputation risks, cash holdings, and payout policies," Finance Research Letters, Elsevier, vol. 59(C).
    13. 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).
    14. Hu, Xinwen & Hua, Renhai & Liu, Qingfu & Wang, Chuanjie, 2023. "The green fog: Environmental rating disagreement and corporate greenwashing," Pacific-Basin Finance Journal, Elsevier, vol. 78(C).
    15. 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.
    16. Lestari, Jenjang Sri & Frömmel, Michael, 2024. "Socially responsible investments: doing good while doing well in developed versus emerging markets?," Research in International Business and Finance, Elsevier, vol. 69(C).
    17. Céline LOUCHE & Guillaume DELAUTRE & Gabriela BALVEDI PIMENTEL, 2023. "Assessing companies' decent work practices: An analysis of ESG rating methodologies," International Labour Review, International Labour Organization, vol. 162(1), pages 69-97, March.
    18. Francesco Cesarone & Manuel Luis Martino & Federica Ricca & Andrea Scozzari, 2023. "Managing ESG Ratings Disagreement in Sustainable Portfolio Selection," Papers 2312.10739, arXiv.org.
    19. Jianglin Dennis Ding, 2024. "Less is More: In Search of Sustainable Investment Premium," International Journal of Economics and Financial Issues, Econjournals, vol. 14(5), pages 233-241, September.
    20. Ubeda, Fernando & Mendez, Alvaro & Forcadell, Francisco Javier & López, Belén, 2024. "How socially sustainable multinational banks promote financial inclusion in developing countries," LSE Research Online Documents on Economics 124260, London School of Economics and Political Science, LSE Library.

    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:9:p:3826-:d:1387786. 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.