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Role of ESG investments in achieving COP-26 targets

Author

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  • Wang, Xiaoyuan
  • Wang, Jiahaoran
  • Guan, Weimin
  • Taghizadeh-Hesary, Farhad

Abstract

This study aims to evaluate the relationship between Environmental, Social, and Governance (ESG) and the goals of COP-26 (reduction of greenhouse gas emissions) in China by applying the Autoregressive distributed lag (ARDL) bounds testing technique with annual data from to 1990–2021. The main findings confirmed that, in the long term, with a 1% improvement in ESG investment, GHG emissions of greenhouse gases in China will decrease by 0.0046%. Simultaneously, ESG had a negative and significant effect in the short term. With a 1% increase in this variable, China's greenhouse gas emissions will decrease by 1.391%. The recommended practical policies in this study are establishing an ESG-investing network (ESGIN), introduction and implementation of ESG investing law, improving digital ESG investing, and enhancing an ESG-oriented culture in business.

Suggested Citation

  • Wang, Xiaoyuan & Wang, Jiahaoran & Guan, Weimin & Taghizadeh-Hesary, Farhad, 2023. "Role of ESG investments in achieving COP-26 targets," Energy Economics, Elsevier, vol. 123(C).
    • Handle: RePEc:eee:eneeco:v:123:y:2023:i:c:s0140988323002554
    DOI: 10.1016/j.eneco.2023.106757
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    More about this item

    Keywords

    ESG investing; COP-26; Greenhouse Gases reduction; China; ARDL bounds test;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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