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Impact of environmental information uncertainty and market competition on corporate ESG performance

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  • Shi, Dinghao
  • Tan, Haoyu
  • Ling, Yixin
  • Liu, Yunuo
  • Liu, Bo
  • Tu, Yongqian

Abstract

Using sample data from China's A-share non-financial listed companies covering the period from 2011 to 2022, this study empirically finds that environmental information uncertainty hinders corporate environmental, social, and governance (ESG) performance. The impact of environmental information uncertainty on ESG performance differs between state-owned enterprises (SOEs) and non-SOEs, with a more pronounced effect on non-SOEs. Moreover, the influence of environmental information on ESG performance varies across firms in different life cycles. Specifically, environmental information uncertainty has a significantly negative (positive) impact on the ESG performance of growth-stage (mature) firms, suggesting that mature firms adopt positive measures to address environmental information uncertainty and thus leading to better ESG performance. Uncertainty regarding environmental information significantly and negatively affects the ESG performance of firms in the decline period, and this effect is more pronounced than that experienced by growth-stage firms. Furthermore, market competition positively affects the firms' ESG performance, with varying effects across firms in different life cycles. Market competition enhances the ESG performance of growth- and mature-stage enterprises. However, it significantly and negatively influences the ESG performance of enterprises in the decline period.

Suggested Citation

  • Shi, Dinghao & Tan, Haoyu & Ling, Yixin & Liu, Yunuo & Liu, Bo & Tu, Yongqian, 2025. "Impact of environmental information uncertainty and market competition on corporate ESG performance," International Review of Financial Analysis, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:finana:v:99:y:2025:i:c:s1057521925000225
    DOI: 10.1016/j.irfa.2025.103935
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