Corporate environmental responsibility and financial performance: Identifying the relationship using the example of Chinese companies
EDN DFWOHK
DOI:
https://doi.org/10.22394/2304-3385-2025-1-96-114Abstract
Introduction. The question of the way, companies can improve their financial performance, while simultaneously fulfilling environmental obligations and achieving long-term sustainable development has become the center of attention in the current research in the field of sustainable development. Objective: using the example of Chinese companies to reveal the relationship between corporate environmental responsibility and financial performance, and to substantiate the role of corporate environmental strategy as an analyzed relationship moderator.
Materials and methods. Desk research of publications; the data used in the empirical analysis are taken from the Wind and CSMAR databases, annual reports of Chinese listed companies, ESG, and corporate social responsibility reports. The research approach is to conduct an empirical analysis of data on Chinese listed companies for the period from 2013 to 2022 (5529 observations) using a regression model.
Results. The analysis verifies that corporate environmental responsibility has a positive impact on financial performance, and this positive impact has a significant lag effect. Besides, compared to non-state-owned enterprises, the improvement in financial performance from the fulfillment of environmental responsibilities by state-owned enterprises is more rapid. Compared with the central and western regions of China, the promotion effect of fulfilling environmental responsibility on financial performance of the listed companies in the eastern region is the most significant. This study demonstrated that proactive environmental strategy plays a moderating role between the analyzed factors.
Discussion. This study introduces for the first time a moderating variable into the basic theoretical framework of the past: “corporate environmental strategy”, which expands the analytical scope of the traditional theoretical model and enables us to study it from a more in-depth and updated perspective. The study has essential theoretical and practical implications for deep understanding the relationship between corporate environmental responsibility and financial performance. The obtained results and conclusions are expected to be of interest not only to the direct subjects of the research – Chinese companies and government, but also to the Russian readers of this journal, who are interested in studying foreign experiences and the prospects of their application in the Russian economy.
KEYWORDS
Corporate environmental responsibility, financial performance, sustainable development, Porter hypothesis.
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