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Green finance policies and corporate environmental, social, and governance performance

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  • Zhang, Yuyang
  • Zhang, Ningning

Abstract

This study examines the impact of green finance policies on the environmental, social, and governance (ESG) performance of Chinese nonfinancial listed companies using data from 2011 to 2022 and applying the difference-in-differences methodology. Findings reveal that these policies significantly enhance ESG performance, with notable variations across firms based on ownership structure and commercial credit levels. Green finance policies foster ESG improvements by stimulating research and innovation while easing corporate financing constraints. A firm size threshold effect is identified, where smaller enterprises benefit more from these policies, whereas larger firms may face transition challenges.

Suggested Citation

  • Zhang, Yuyang & Zhang, Ningning, 2025. "Green finance policies and corporate environmental, social, and governance performance," Finance Research Letters, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325006816
    DOI: 10.1016/j.frl.2025.107421
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    References listed on IDEAS

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    2. Liang, Qianxu & Wang, Chaonan & Li, Yongping, 2025. "How does green finance influence enterprise greenwashing tendencies? Theoretical and empirical evidence from China," International Review of Financial Analysis, Elsevier, vol. 106(C).
    3. Ye, Jinfen & Wang, Yubo & Yang, Jiayan, 2025. "Green finance and environmental governance in river basin economies: Mechanism analysis based on green innovation and industrial upgrading in the Yangtze River region," Finance Research Letters, Elsevier, vol. 86(PF).
    4. Fan, Congying & Peng, Ke, 2025. "How does supply chain finance drive corporate green transition? The role of credit resource availability," Finance Research Letters, Elsevier, vol. 86(PA).
    5. Ren, Zhongfu & Xu, Han, 2025. "From fee to tax: Can legal system strengthening enhance environmental performance?," Finance Research Letters, Elsevier, vol. 86(PF).
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