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Greening Corporate Environmental, Social, and Governance Performance: The Impact of China’s Carbon Emissions Trading Pilot Policy on Listed Companies

Author

Listed:
  • Rui Zhou

    (The Institute of Regional Modernization, Jiangsu Provincial Academy of Social Sciences, Nanjing 201824, China)

  • Jiajun Lou

    (School of Business, Jiangsu Ocean University, Lianyungang 222005, China)

  • Bing He

    (School of Business, Jiangsu Ocean University, Lianyungang 222005, China)

Abstract

With carbon emissions continuing to rise, global warming has become a popular research topic. To address climate change, China is taking proactive measures to reduce its carbon emissions. Covering the period between 2009 and 2021, this study utilizes data from 3668 publicly listed companies in China, along with data from their respective cities, to investigate the impact of the carbon emissions trading pilot policy on their environmental, social, and governance (ESG) performance. The conclusions show that the policy has greatly improved corporate ESG performance. However, its impact on the corporate ESG performance has varied over time, across different entities, and among different cities. Furthermore, the companies’ level of green innovation plays a crucial intermediary role. Additionally, a company’s risk-bearing capacity and level of urban green credit support positively moderate the effectiveness of the policy. These findings enrich our understanding of the relationship between the pilot policy and corporate ESG performance.

Suggested Citation

  • Rui Zhou & Jiajun Lou & Bing He, 2025. "Greening Corporate Environmental, Social, and Governance Performance: The Impact of China’s Carbon Emissions Trading Pilot Policy on Listed Companies," Sustainability, MDPI, vol. 17(3), pages 1-21, January.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:3:p:963-:d:1576429
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    References listed on IDEAS

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    Cited by:

    1. Eric M. Chang & Jo-Han Cheng, 2025. "The Evolution of Environmental, Social, and Governance (ESG) Performance: A Longitudinal Comparative Study on Moderators of Agenda 2030," Sustainability, MDPI, vol. 17(19), pages 1-28, September.
    2. Eid M. Alotaibi & Abdulaziz M. Alwathnani, 2025. "AI-Enabled ESG Compliance Audit for Stakeholders," Sustainability, MDPI, vol. 17(21), pages 1-19, October.
    3. Changjiang Zhang & Sihan Zhang & Zhepeng Zhou & Bing He, 2025. "Merging Economic Aspirations with Sustainability: ESG and the Evolution of the Corporate Development Paradigm in China," Sustainability, MDPI, vol. 17(20), pages 1-23, October.
    4. Abdulrahman Alhazemi, 2025. "Integrating ESG Framework with Social Sustainability Metrics: A Dual SEM-PLS Formative–Reflective Model Perspective," Sustainability, MDPI, vol. 17(6), pages 1-27, March.
    5. Miaomiao Yi & Fei Ren & Zhang-Hangjian Chen, 2025. "Institutional Cross-Ownership and Corporate Sustainability Performance: Empirical Evidence Based on United Nations SDGs Ratings," Sustainability, MDPI, vol. 17(10), pages 1-22, May.

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