Impact of Natural Disasters on ESG Performance of Agricultural Firms

Global climate warming has led to the frequent occurrence of natural disasters, threatening the stability of agricultural production and the survival of agricultural enterprises. The existing literature presents mixed evidence regarding the impact of natural disasters on corporate ESG performance. Some studies argue that natural disasters promote ESG performance; however, such conclusions only hold for non-agricultural enterprises. Agricultural enterprises are highly dependent on natural conditions, and their core production factors are vulnerable to direct damage from natural disasters. Meanwhile, they are characterized by long production cycles and high asset specificity. After disaster shocks, agricultural enterprises have to prioritize production recovery, so natural disasters exert a dominant negative effect on their ESG performance. Based on the above context, here we take the performance of Chinese A-share listed agricultural companies between 2010 and 2023 as the research sample to explore the impact of natural disasters on the ESG performance of agricultural enterprises. The empirical results show that natural disasters significantly inhibit the ESG performance of agricultural enterprises. Mechanism tests indicate that natural disasters weaken ESG performance by damaging supply chain resilience, hindering green innovation, and disrupting internal control. A cross-sectional heterogeneity analysis reveals that the inhibitory effect is more pronounced for large-scale enterprises, enterprises with lower executive green cognition, and enterprises located in areas that are not major grain-selling areas. This study enriches the research on the economic consequences of natural disasters and the factors influencing corporate ESG performance. It also provides important practical implications for strengthening the ESG fulfillment of agricultural enterprises and accelerating the cultivation of new productive forces in agriculture.