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How does peer firms' ESG performance affect carbon emission reductions ?

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  • Wang, Pei
  • Xue, Weixian
  • Li, Zhi

Abstract

This study analyzes the green spillover effects of peer firms' ESG performance on the carbon reduction actions of focal organizations from 2013 to 2023. Empirical data indicates that superior ESG practices among industry peers substantially improve the decarbonization efforts of focal enterprises, principally mediated by diminished financial restrictions and increased public attention. Competitive pressures and the pursuit of legitimacy compel focal firms to implement sustainable practices, especially when peers exhibit genuine ESG commitments. The findings highlight the pivotal influence of peer dynamics and institutional circumstances in expediting business climate shifts.

Suggested Citation

  • Wang, Pei & Xue, Weixian & Li, Zhi, 2025. "How does peer firms' ESG performance affect carbon emission reductions ?," Finance Research Letters, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325009699
    DOI: 10.1016/j.frl.2025.107711
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    References listed on IDEAS

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    Cited by:

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    3. Suo, Wen & Qiao, Pengliang, 2025. "Patient capital, green innovation bubble, and corporate ESG performance," Finance Research Letters, Elsevier, vol. 86(PF).

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