An Empirical Analysis of ESG Scores and Firm Performance Based on the CSI 300 Index

Jiahua Zhang

doi:10.54097/zsjvy730

Authors

Jiahua Zhang

DOI:

https://doi.org/10.54097/zsjvy730

Keywords:

Environmental, Social, and Governance (ESG); Firm Performance; CSI 300 Index.

Abstract

Environmental, Social, and Governance (ESG) criteria have emerged as pivotal factors in assessing a firm's sustainability and ethical impact. This paper investigates the relationship between ESG disclosure scores and firm performance among Chinese listed companies. Leveraging data from the CSMAR database, the study employs regression analysis to explore the impact of ESG pillars on operating performance (ROA), financial performance (ROCE), and market performance (Tobin’s Q). The findings reveal a significant positive correlation between the Social (S) pillar of ESG and firm performance, indicating that investments in social practices such as employee relations and community engagement contribute to stronger financial metrics. Conversely, the relationships with the Environmental (E) and Governance (G) pillars appear less clear, suggesting variability in ESG integration and industry-specific standards. These results underscore the evolving landscape of ESG practices in China and highlight the importance of enhancing ESG disclosures and adopting sustainable business practices in response to shifting market expectations and regulatory emphasis.

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