Assessing the Impact of ESG Performance on Financial Outcomes: Risk and Innovation as Moderating Factors in China’s A-Share Market

DOI

10.2991/978-94-6463-702-1_62How to use a DOI?

Keywords

ESG Evaluation; Financial Performance; Risk Management; Innovation Dynamics

Abstract

The evaluation of Environmental, Social, and Governance (ESG) criteria represents a critical strategic decision for corporations amidst the global trend towards sustainable development. As China transitions from a planned economy to a socialist market economy characterized by market predominance, the significance of ESG integration in corporate management and operations has become increasingly pronounced. This paper integrates macro-level policy frameworks with micro-level corporate financial decision-making, utilizing data from A-share listed companies in Shanghai, Shenzhen, and Beijing spanning from 2014 to 2023. It systematically investigates the influence of ESG performance on corporate financial outcomes and rigorously examines the moderating effects of corporate risk and innovation levels on the ESG-financial performance nexus. The findings indicate that robust ESG performance exerts a favorable long-term impact on financial performance. Notably, both risk and innovation levels exert negative moderating effects on the ESG-performance relationship, offering critical insights into the conventional practice of substantial investments in innovation. This study augments the empirical literature on the ESG-corporate performance relationship, underscores the pivotal role of ESG strategies in enhancing long-term financial outcomes, and furnishes a practical foundation for corporate leaders in the formulation of sustainable development strategies. Furthermore, this research provides policy recommendations and strategic guidance for governments and corporations in navigating market fluctuations and advancing sustainable development objectives.

Copyright

© 2025 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  - Zixiang Xu
PY  - 2025
DA  - 2025/05/05
TI  - Assessing the Impact of ESG Performance on Financial Outcomes: Risk and Innovation as Moderating Factors in China’s A-Share Market
BT  - Proceedings of the 2025 10th International Conference on Financial Innovation and Economic Development (ICFIED 2025)
PB  - Atlantis Press
SP  - 587
EP  - 599
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-702-1_62
DO  - 10.2991/978-94-6463-702-1_62
ID  - Xu2025
ER  -