IDEAS home Printed from https://ideas.repec.org/a/sae/sagope/v15y2025i3p21582440251369170.html
   My bibliography  Save this article

The Cost of ESG Decoupling: How Misaligned Disclosures Undermine Corporate Sustainability?

Author

Listed:
  • Xiaoyi Zhan
  • Yong Zhan
  • Guangjin Li

Abstract

This paper investigates a novel problem of ESG (environmental, social, and governance), namely the decoupling phenomenon that corporate ESG information disclosure is inconsistent with actual performance. Based on 12,551 company-year observations of Chinese A-share listed companies from 2009 to 2022, we investigated the impact of ESG decoupling on corporate sustainable development and explored the underlying mechanisms from the perspective of stakeholder theory. We find that ESG decoupling significantly undermines corporate sustainability. Mechanism analysis shows this negative impact results from reduced stability in customer partnerships and increased corporate financing constraints. Further considering the moderating role of China’s institutional environment on this impact, a strong formal institutional environment (e.g., regulatory framework) reduces this negative effect, whereas the informal institutional environment (e.g., media attention) amplifies it. The research underscores the importance of aligning actions with disclosures, offering practical recommendations for corporate sustainable development. JEL Classification: M14.

Suggested Citation

  • Xiaoyi Zhan & Yong Zhan & Guangjin Li, 2025. "The Cost of ESG Decoupling: How Misaligned Disclosures Undermine Corporate Sustainability?," SAGE Open, , vol. 15(3), pages 21582440251, August.
    • Handle: RePEc:sae:sagope:v:15:y:2025:i:3:p:21582440251369170
    DOI: 10.1177/21582440251369170
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/21582440251369170
    Download Restriction: no
    File URL: https://libkey.io/10.1177/21582440251369170?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:sagope:v:15:y:2025:i:3:p:21582440251369170. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.