ESG and corporate financial performance with enterprise risk as mediator and COVID-19 as moderator
List of Authors
  • AnChao Wang , Tze-Haw Chan

Keyword
  • ESG; Corporate Financial Performance; Chinese Listed Companies; COVID-19; Business Sustainability

Abstract
  • Disruptions stemming from movement restrictions and production halts during the COVID-19 pandemic have posed significant business and financial challenges for a majority of publicly listed Chinese companies. This backdrop has prompted inquiries into the effectiveness of Environmental, Social, and Governance (ESG) initiatives in alleviating financial strains both prior to and amid the pandemic. Complicating this inquiry are conflicting findings from recent studies, particularly during crisis periods. This study delves into the role of corporate ESG performance as a risk-mitigation mechanism within the volatile crisis context instigated by COVID-19. It specifically investigates the interplay between COVID-19 and ESG to discern whether ESG practices of Chinese firms listed on stock exchanges had differential impacts on corporate financial performance (CFP) before and during the pandemic. Additionally, the study scrutinizes the influence of ESG performance on CFP, integrating mediating variables such as Enterprise Risk (ER). By empirically examining the relationship between ESG and CFP, this research aims to shape agendas that span across Sustainability, Finance, Risk, and Compliance domains. The insights derived are anticipated to assist listed companies in emphasizing and enhancing their ESG performance, thus fortifying their resilience against business uncertainties.

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