Research on the Relationship Between ESG and Firm Value

Abstract

In recent years, sustainable development has become more and more important to enterprises. While the state controls and controls, investors also have different evaluations on enterprises with different esg performance, and ESG performance has gradually become an important basis for enterprise valuation and other aspects. For the purpose of studying whether ESG indicators are positively associated to enterprise value, this paper uses ESG data and company data from 2015 to 2022, and adopts fixed panel regression analysis after data processing and testing. Through empirical analysis, this study comes to the following conclusion: ESG performance and enterprise value significantly positively correlate. Or, to put it another way, there is a significant connection between ESG performance and company value. Further research revealed that the relationship between the two is also heterogeneous between the nature of the enterprise and the industry. As a consequence, this paper suggests that enterprises should attach importance to the implementation of strategies in the three dimensions of ESG. While improving their own performance, they should not ignore the improvement of ESG performance, enhance their own value, and increase market competitiveness.