The Relationship Between Environmental, Social, and Governance (ESG) Disclosures and Firm Financial Performance: Evidence from Publicly Listed Companies
DOI:
https://doi.org/10.62051/ijgem.v8n3.16Keywords:
Environmental, Social, and Governance (ESG), Financial Performance, Return on Assets (ROA), Return on Equity (ROE), Corporate GovernanceAbstract
With increasing global focus on sustainability and corporate responsibility, the demand for comprehensive Environmental, Social, and Governance (ESG) disclosures has grown significantly. This research explores the relationship between ESG (Environmental, Social, and Governance) disclosures and the financial performance of publicly traded companies in China. Utilizing both descriptive and inferential statistical techniques, we assess key financial indicators, including Return on Assets (ROA), Return on Equity (ROE), and Tobin’s Q, to investigate the influence of ESG reporting on financial outcomes. The research demonstrates that that firms with greater ESG disclosure, particularly in environmental and social aspects, generally experience improved profitability and enhanced investor trust. Additionally, the study highlights that comprehensive ESG reporting can increase market valuation, supporting long-term financial success. The research provides essential insights about ESG practices in China's emerging market as it presents practical recommendations for business leaders and policymakers and investors.
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