ESG Performance and its Impact of on Corporate Performance: Take China Everbright Bank as an Example

Abstract

This paper has investigated China Everbright Bank (CEB)’s performance on ESG and analyzed the impact of ESG performance on CEB’s financial outcome. During the reported period, CEB has been performing well on ESG, especially on social perspective. From environmental perspective, CEB took proactive steps to mitigate its negative environmental impact. This included reducing emission by strictly conduct regulation within the company, assessing environmental risks associated with key industries and clients and setting rules on energy conservation. The bank also prioritized compliance with environmental standards, pollution control, and ecological protection in its credit approval processes. From social perspective, CEB has been actively promoting democracy and equality in employment by combating various discrimination, and continuously ensuring employee welfare besides wages, such as health care and skill training. Regarding governance, CEB has adopted strict supervision on its supply chain, strengthening the management of the procurement process by establishing an intelligent procurement platform. It has also emphasized supplier risk management. Considering the financial metrics of CEB in last years, the study suggests that the long-term profitability, operational capacity and growth potential of CEB have been positively affected, while the market value and the solvency are not. The paper concludes that ESG criteria can be considered as a reliable tool in business evaluation of potential and sustainability, therefore incorporated into business operation and investment.