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Government Environmental Regulation and Corporate ESG Performance: Evidence from Natural Resource Accountability Audits in China

Author

Listed:
  • Yingzheng Yan

    (College of Economics and Management, Fujian Agriculture and Forestry University, Fuzhou 350002, China)

  • Qiuwang Cheng

    (School of Economics and Business Administration, Postdoctoral Research Center of Business Administration, Chongqing University, Chongqing 400044, China)

  • Menglan Huang

    (College of Economics and Management, Fujian Agriculture and Forestry University, Fuzhou 350002, China)

  • Qiaohua Lin

    (College of Economics and Management, Fujian Agriculture and Forestry University, Fuzhou 350002, China)

  • Wenhe Lin

    (College of Economics and Management, Fujian Agriculture and Forestry University, Fuzhou 350002, China)

Abstract

With the increasing global concern for the ecological environment and sustainable development, all countries have proposed environmental regulatory policies to improve the quality of their ecological environments. China has also proposed an environmental regulation policy: Leading an officials’ accountability audit of natural resources (AANR). As the main subject of consuming resources, the sustainability of enterprises has become a focus of all parties. The Environmental, Social, and Governance (ESG) metric measures corporate sustainability. As a result, companies’ ESG performance has gained the community’s attention. Based on data from Chinese A-share listed companies in Shanghai and Shenzhen from 2011 to 2019, this study investigates the role of AANR on the ESG performance of companies via the difference-in-differences (DID) method. This study found that implementing the AANR pilot significantly negatively impacted corporate ESG performance. This result was found to remain robust after passing parallel trend and robustness tests. Further research found that the AANR differed significantly across corporate ownership and regions in corporate ESG performance. First, pilot implementation had a more significant impact on the ESG performance of non-state enterprises. Second, the differences across regions showed that the central region had the most significant impact, followed by the western region, while the eastern region had the most negligible impact. This study will help government departments improve the AANR system and enable companies to focus on their ESG performance.

Suggested Citation

  • Yingzheng Yan & Qiuwang Cheng & Menglan Huang & Qiaohua Lin & Wenhe Lin, 2022. "Government Environmental Regulation and Corporate ESG Performance: Evidence from Natural Resource Accountability Audits in China," IJERPH, MDPI, vol. 20(1), pages 1-16, December.
    • Handle: RePEc:gam:jijerp:v:20:y:2022:i:1:p:447-:d:1016778
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    References listed on IDEAS

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    Cited by:

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    2. Nie, Song & Liu, Junxian & Zeng, Gang & You, Jiyuan, 2023. "Local government debt pressure and corporate ESG performance: Empirical evidence from China," Finance Research Letters, Elsevier, vol. 58(PB).
    3. Anjun Hu & Xianzhu Yuan & Shuangshuang Fan & Shali Wang, 2023. "The Impact and Mechanism of Corporate ESG Construction on the Efficiency of Regional Green Economy: An Empirical Analysis Based on Signal Transmission Theory and Stakeholder Theory," Sustainability, MDPI, vol. 15(17), pages 1-24, September.
    4. Işık, Cem & Ongan, Serdar & Islam, Hasibul & Menegaki, Angeliki N., 2024. "A roadmap for sustainable global supply chain distribution: Exploring the interplay of ECON-ESG factors, technological advancement and SDGs on natural resources," Resources Policy, Elsevier, vol. 95(C).
    5. Xiao, Zhongyi & Huang, Xinfei & Chen, Haitao, 2024. "The impact of corporate ESG performance on buyers’ bargaining power in the industrial chain: Evidence from China," Finance Research Letters, Elsevier, vol. 60(C).
    6. Zhang, Yanan & Zhang, Xiaoyu, 2024. "Top management team functional diversity and ESG performance," Finance Research Letters, Elsevier, vol. 63(C).

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