The Value Creation Mechanism of ESG: An Empirical Focus on China’s Power Sector under the Dual-Carbon Goals

DOI

10.2991/978-94-6239-777-4_60How to use a DOI?

Keywords

ESG; Firm Value; Financial Performance; Electricity Industry; Dual-Carbon Goals

Abstract

Against the backdrop of China’s ambitious Dual-Carbon Goals, the power sector faces immense pressure to decarbonise, making the Environmental, Social, and Governance (ESG) framework a critical strategic tool. This paper investigates the mechanisms through which ESG performance drives firm value and financial performance in China’s power sector. First, it explains the research background and shows why the power sector is an important case in the context of low-carbon transition and energy security. Second, it describes the current development of the sector and the growing role of ESG disclosure and governance. Third, it analyses the positive effects of ESG through financing capability, investor confidence, operational efficiency, and long-term strategic resilience. At the same time, the paper identifies three major problems: high transition costs and short-term financial pressure; incomplete ESG disclosure; and greenwashing risks arising from weak implementation capacity. In response, the study makes three recommendations: stronger substantive ESG governance, better ESG disclosure quality, and phased low-carbon transition methods. The study concludes that in China’s power industry, strong ESG practices are a major factor in determining corporate value and financial performance. However, the quality of ESG implementation, the veracity of business disclosures, and the strategic balancing of short-term transition costs versus long-term sustainable development goals are all necessary for this value to be realised.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Keyu Wang
PY  - 2026
DA  - 2026/09/30
TI  - The Value Creation Mechanism of ESG: An Empirical Focus on China’s Power Sector under the Dual-Carbon Goals
BT  - Proceedings of the 2026 8th International Conference on Economic Management and Cultural Industry (ICEMCI 2026)
PB  - Atlantis Press
SP  - 567
EP  - 579
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-777-4_60
DO  - 10.2991/978-94-6239-777-4_60
ID  - Wang2026
ER  -