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ESG ratings, financial performance and stock returns

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  • Zhang, Qian
  • Zhang, Chengchao

Abstract

This paper selects quarterly data of A-share listed companies from 2016 to 2023 to explore the impact of corporate ESG performance on stock returns and its underlying mechanism, as well as analyze the differences in impact from perspectives such as property rights nature and industry nature. The study finds that: corporate ESG performance is positively correlated with stock returns; good ESG performance can enhance stock returns by improving corporate performance; among state-owned enterprises, the impact of ESG performance on stock excess returns is not significant, while among private enterprises, it has a significant positive impact; among enterprises in heavily polluting industries, the impact of ESG performance on stock excess returns is not statistically significant, while among enterprises in non-heavily polluting industries, it has a significant positive impact.

Suggested Citation

  • Zhang, Qian & Zhang, Chengchao, 2026. "ESG ratings, financial performance and stock returns," Finance Research Letters, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:finlet:v:99:y:2026:i:c:s1544612326004368
    DOI: 10.1016/j.frl.2026.109907
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