ESG performance and firm value in the Chinese market

While the recent COVID-19 pandemic has accelerated environmental, social, and governance (ESG) investing, there remains a growing sense of uncertainty in this sector. This study investigates the impacts of ESG-related information disclosures on firm value and tests the relationship between ESG scores and firm value. Using a Chinese dataset, we run a fixed-effects panel regression model to assess the impact of ESG performance on firm value in terms of enterprise multiples while controlling for corporate attributes. Our results reveal that disclosing ESG-related information significantly increases firm value, and this relationship has intensified after the pandemic. However, the influence of ESG scores on firm value only seems significant after the pandemic. Environmental score significantly affects firm values whereas social and governance category scores do not.