Author(s)

Yijia Ma

Corresponding Author

Yijia Ma

ABSTRACT

Nowadays, as China's economic development has entered a new stage, greater attention has been paid to sustainability issues. As a typical pronoun of green economy, ESG (Environment, social responsibility, and corporate governance) investment has been emphasized in many western developed countries, while China did not raise the related research until recent years. This article aims to explore the relationship between ESG and financial performance, to enrich the study of ESG under the Chinese background. Through analyzing a sample of 495 observations (data of 116 firms for the period 2015–2019), the results of the correlation and regression show that the correlation between ESG and financial performance is not significant in the short term. This paper also discusses the reasons for this result. On the one hand, the development of China's capital market started late. Compared with ESG, the formation of a standardized market system and the creation of wealth are of higher priority. On the other hand, even an investment in ESG may not be immediately effective, which may be a long-term investment.

KEYWORDS

ESG, ESG investing, financial performance, CSI300