Aligning ESG talk and walk: The effect of corporate site visits on ESG decoupling

This study examines whether corporate site visits reduce the gap between firms’ environmental, social, and governance (ESG) disclosure and actual performance (ESG decoupling). Using 4211 Chinese A-share listed firms from 2017 to 2023, we find that stakeholder engagement through site visits significantly mitigates ESG decoupling. Drawing on textual analysis of 1543,809 question-and-answer transcripts from site visits, we show that the effect is driven by substantive ESG discussions rather than visit frequency alone. We identify two channels-“ESG Talk” and “ESG Walk.” Site visits enhance ESG Talk by improving disclosure transparency and increasing the material content of ESG reporting, while strengthening ESG Walk by improving ESG performance and reducing controversies. The results are robust to endogeneity controls, alternative measures, and extensive fixed effects. The effect is stronger among financially constrained firms and is more pronounced for non-state-owned enterprises, firms in low-carbon pilot cities, firms with weaker initial environmental awareness, and those issuing voluntary ESG reports. The impact is amplified in firms with more female, highly educated, or younger executives, and where alternative monitoring mechanisms are limited. Engagement by financial institutions exerts particularly strong influence. Overall, the findings highlight corporate site visits as an effective governance mechanism for aligning ESG disclosure with actual performance.