Study on the Impact of ESG Performance on Corporate Profitability

Abstract

This study utilizes pre-processed data of all A-share listed companies from 2014 to 2024 as the sample. By constructing regression models and mediation effect models, it investigates the transmission mechanism among ESG performance, corporate risk level, and profitability. The findings indicate that better ESG performance is associated with higher corporate profitability. Moreover, superior ESG performance is linked to lower corporate risk levels, which in turn enhances profitability. The contributions of this research lie in its innovative perspective and practical implications: it addresses existing research gaps by exploring the “pathway” between ESG performance and profitability from the perspective of corporate risk level, thereby enriching the literature on the economic consequences of ESG performance. The conclusions also provide valuable references and insights for economic practices by corporations, governments, regulatory authorities, and other stakeholders.